Preamble

The House met at Half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

ASHDOWN FOREST BILL,

Read the Third time, and passed.

LONDON COUNTY COUNCIL (GENERAL POWERS) BILL [King's Consent signified].

Bill read the Third time, and passed.

Oral Answers to Questions — EMPLOYMENT

Appointments Department

Sir John Mellor: asked the Minister of Labour how many persons were placed during 1948 by his Appointments Department and at what initial salary; what was the average cost, including overhead expenses, per person placed; how many of these placings were in Government service or nationalised industries; and whether such placings were competitive with private agencies.

The Minister of Labour (Mr. Isaacs): Thirty thousand, nine hundred and seventy-four in 1948. The great majority of these were in private employment. Records are not maintained in such a way as to give the other statistical information asked for. There is no restriction on competition by private agencies in this field, and there is a substantial amount of co-operation with a number of them.

Sir J. Mellor: If there are no statistics available, how can one possibly gauge the efficiency of this service? Surely the Minister should be in a position to prove that the Appointments Department are at least as efficient as private agencies?

Mr. Isaacs: We do not keep a record of the exact wages paid to various

people; we know that they range from about £400 to over £1,000. The other statistics as to the cost per individual cannot be accurately ascertained because this Department does other work in addition to actual appointments, such as careers advice, manpower surveys and the recruiting service for the nursing profession. All these are involved, and we cannot separate them.

Sir J. Mellor: Would the right hon. Gentleman agree that there is nothing which the Appointments Department can do which private agencies cannot do more cheaply?

Mr. Isaacs: I do not admit that. I am satisfied that many of the 30,000 whom we have placed would not have been placed but for the services which we provided for them.

Ex-Service Men (Training)

Mr. Hurd: asked the Minister of Labour what arrangements are being made to help those who entered into Regular engagements to train, after their time in the Services, for the professions and business.

Mr. Isaacs: A scheme was recently started to provide training for those who wish to enter business. Full particulars are given in a leaflet (P.L. 309) a copy of which I am sending to the hon. Member. There are no similar arrangements for training for the professions.

Mr. Hurd: In view of the statements which the Minister of Defence has made about the desirability of providing training for civilian life for ex-Regulars, would not the Minister of Labour expand his scheme to cover the professions as well as business?

Mr. Isaacs: We have examined that, but the point is that ex-Regular officers who leave after long service have usually reached an age when it is not easy for them to undertake a long course such as is required for the professions. We have not turned down the idea completely. We have been examining it in regard to younger men who leave after less extended service, and, as I say, we have not abandoned it as impracticable. We wish to see whether something can be done.

London Docks (Canadian Boats)

Mr. Piratin: asked the Minister of Labour how long have the Canadian boats, s.s. "Beaverbrae" and s.s. "Agramont" been in the London Port; and whether the Port of London Docks Board operated the full terms of the docks labour scheme from the time of the arrival of these two boats.

Mr. Isaacs: The "Beaverbrae" has been in the London Docks since 4th April last and the "Agramont" since 10th May. In reply to the second part of the Question I would refer the hon. Member to the statement which I made in reply to a Private Notice Question by the right hon. Member for Warwick and Leamington (Mr. Eden) on 1st July.

Mr. Piratin: In view of the length of time that these boats have been in the London Port and the fact that at no time prior to two or three weeks ago did the Port authorities insist that these boats should be unloaded by the dockers, could the right hon. Gentleman explain why the Port authorities took this provocative action, which led to the present dispute?

Mr. Isaacs: I have nothing to add to the reply which was previously given, and to which I have referred.

Mr. Gallacher: Is it not the case that there is a strike on these two boats carried on by a bona fide Canadian trade union—[HON. MEMBERS: "No."]—and that an American union is trying to destroy the Canadian union so that the Americans can get control of the Canadian seaboard?

Mr. Speaker: We can debate this tomorrow and not now.

Mr. Gallacher: I shall have something to say tomorrow.

Stornoway

Mr. Malcolm MacMillan: asked the Minister of Labour what is the number of unemployed persons on the Stornoway register at the most recent census; and what percentage this is of the local insurable population.

Mr. Isaacs: The number of unemployed persons on the register at 13th June was 660. This represents 13 per cent. of the number of employees to whom insurance cards were issued at July, 1948.

Oral Answers to Questions — SCOTLAND

Mastitis (Cure Claim)

Sir William Darling: asked the Secretary of State for Scotland why a registered medical practitioner, who claims to have a cure for mastitis and has made offers to his Department, is not allowed to demonstrate this cure without submitting in advance information which might prejudice a fair examination of the claim; and if he will take steps to remedy this situation.

The Secretary of State for Scotland (Mr. Woodburn): The medical practitioner referred to is free to demonstrate his alleged cure for mastitis, but it plainly cannot receive official backing until it has been thoroughly tested by impartial scientific experts. For this purpose details and methods of treatment require to be disclosed. I cannot accept the suggestion that disclosure of this information in advance might prejudice a fair examination of his claim.

Sir W. Darling: The right hon. Gentleman will have in mind that Dr. Jenner had the same difficulty in impressing the value of his cure upon officialdom in his day?

Mr. Woodburn: Yes, Sir, except that today, of course, we have scientific methods of testing cures that were not in existence in those days.

Sir W. Darling: asked the Secretary of State for Scotland what action has been taken on the evidence submitted to the Milk Committee of Inquiry for Scotland, showing that the milk output might be increased by 15 per cent.; and if any investigation is being made of the validity of this evidence.

Mr. Woodburn: I assume that the evidence to which the hon. Member refers was that submitted to the Committee by the medical practitioner mentioned in the hon. Member's Question to which I have just replied, and was based on his claim to have found a cure for mastitis. I have accordingly nothing to add to what I have already said on this matter.

Sir W. Darling: Is it not the case that this reputable medical practitioner is prepared to have experiments made at his


own expense, if the Department do not insist on disclosing the formula in advance?

Mr. Woodburn: The Department has to be rather careful. There are a lot of people who think they are wonderful inventors. We have to be rather careful how far people can experiment without getting scientific approval.

Sir W. Darling: Would the right hon. Gentleman suggest that the scientific dignity of the Department is more important than a cure for mastitis?

Mr. Quintin Hogg: Is not the disclosure of the nature of a remedy the necessary hall-mark of a reputable medical practitioner?

Mr. Woodburn: Yes, Sir, and in some cases where private practitioners are involved the Department has to be rather careful.

Pier Scheme, Portnaguran

Mr. M. MacMillan: asked the Secretary of State for Scotland whether sanction has yet been given by the Scottish Department concerned to proceed with the proposed pier at Portnaguran; and when the work is likely to commence.

Mr. Woodburn: The scheme for a pier and boatslip at Portnaguran submitted by the county council in April has been examined by technical officers of the Scottish Home Department and the county council were asked on 8th June to consider some modifications.

Road, Isle of Barra

Mr. M. MacMillan: asked the Secretary of State for Scotland what the Department of Agriculture's plans are for the construction of an adequate road to serve the tenants of the Department's estate at Eoligarry, Isle of Barra; and when the work is to begin.

Mr. Woodburn: Investigations are at present being made in this matter, and I shall communicate with the hon. Member when I am in a position to do so.

Mr. MacMillan: Would the right hon. Gentleman bear in mind, particularly as this is one of the very oldest permanent estates for which the Department are completely responsible, that the work in question does not need to be held up for consultations with other authorities?

Mr. Woodburn: As the hon. Member knows, the territory in this part of the country is not such that it is easy to make roads without taking into account all the questions of drainage and access for the various people concerned, which are making it rather difficult to construct a road.

Mr. MacMillan: Will the right hon. Gentleman also remember, on the other hand, that this territory without roads is an extremely difficult territory in which to live, and will he therefore treat the matter as all the more urgent?

Alleged Salmon Poaching, Helmsdale

Sir David Robertson: asked the Secretary of State for Scotland whether he is aware that salmon are being captured illegally in Helmsdale by gill nets which blockade the river, where Boyd Brothers, fish merchants, are buying the stolen fish and consigning it to David King, Birmingham, as white fish, so that British Railways are transporting the fish for account of the Ministry of Food at the taxpayers' expense, particulars of which have been sent to him by the hon. Member for Streatham; and whether he will take action to prosecute those concerned and to ensure the enforcement of the law in future.

Mr. Hector Hughes: On a point of Order, Mr. Speaker. May I ask for your guidance with regard to this Question? Is it in Order to impute criminal acts to named persons, as this Question does, who have not been convicted, or even charged, without giving those persons an opportunity of defending themselves; and alternatively is the doing so, as is done in this Question, a breach of the traditions of this House?

Mr. Speaker: No, not if an hon. Member thinks that some misdemeanour has been committed. He is entitled to bring it to the notice of the Minister concerned. An hon. Member is always responsible for the particulars which he puts in a Question. I have ascertained, in regard to this Question, that in matters of this kind there is some responsibility on the Secretary of State for Scotland, and therefore the Question is in Order.

Mr. Hughes: Further to that point of Order. Where there are other ways and


means whereby the alleged offence could be brought to the notice of the Lord Advocate in regard to Scotland or the Attorney-General in regard to England, would not that course be the better course to adopt, instead of making, as is here made, clear criminal charges of consigning salmon as white fish?

Mr. Speaker: Oh, no; I remember in days past that any number of hon. Members raised Questions of this kind and asked the Government to prosecute. They are entitled to do so. They are responsible for statements in the Questions, but that is all. They are entitled to put the Questions.

Mr. Gallacher: Is it in Order to refer to a poached salmon as a "stolen" salmon? I always understood that poaching was quite an honest occupation.

Mr. Platts-Mills: Might not this be treated lightly and simply described as the normal course of private enterprise?

Sir D. Robertson: Further to that point of Order, and by way of explanation, may I say that I brought the facts of this case to the notice of the Secretary of State for Scotland a month ago. I waited for him to act; he did not do so; I went to Helmsdale myself, I saw the illegal nets blocking the river, and I was able to catch the receivers—

Mr. Speaker: The hon. Member is now making a statement.

Mr. Scollan: I would like to ask you, Mr. Speaker, if it is within the Rules of this House to make definite charges of breaking the law against certain people who are named, without giving them a chance to establish their innocence?

Mr. Speaker: I have said three times that it is quite in Order.

Mr. Woodburn: The reply to the Question is that I am aware that poaching of salmon is reported at Helmsdale. Inquiries are proceeding into the matters referred to in the Question, and I regret that I cannot at this stage make any further statement.

Sir D. Robertson: Is not that a most amazing answer? Why did the right hon. Gentleman discount the statement made by the Lord Lieutenant of Sutherland

which I passed to him a month ago? Why did he mislead this House on 21st June by stating that these complaints were exaggerated? Is he aware that I caught this stolen consignment in boxes in the guard's van at Inverness?

Mr. Woodburn: First of all, the hon. Member raised allegations concerning practically the whole of the county, and did not specify Helmsdale as a single item in the last Question—

Sir D. Robertson: Oh, yes.

Mr. Woodburn: So far as the whole county was concerned, the allegations, it was reported to me, were exaggerated. I do not deny that such things can take place in the Highlands; it has been known in the past. The matter had to be considered. The hon. Gentleman has now reported a specific case and that must be investigated by the legal authorities. I think he will agree that once the case comes into the hands of the legal authorities, it would be improper for me to comment further.

Mr. Stokes: May I ask whether this House would not have been saved a great deal of trouble if the questioner had made clear that it was the landlords who "pinched" the salmon rights first?

Mr. M. MacMillan: Whilst safeguarding the rights of legitimate poachers in this area, will the right hon. Gentleman take the most severe measures to ensure that political poachers do not come up to Caithness from Streatham?

Highlands Resettlement

Colonel Gomme-Duncan: asked the Secretary of State for Scotland whether he will consider making a grant to the Society of Clann Albhinn for the work they are doing in undertaking the resettlement of the Highlands on a practical basis.
On a point of Order, Mr. Speaker. May I draw your attention to the fact that I put down this Question to the Treasury as the only possible people who can answer, and that they have passed it on to the Secretary of State, who cannot possibly give an answer?

Mr. Woodburn: I have not received any application from the Society for a grant, and while I would be prepared to


consider any representations they may wish to put before me, I can hold out no hope of a grant being made available for the general purpose indicated by the hon. Member. Might I add that the proper authority for the making of grants is the Secretary of State for Scotland and not the Treasury?

Colonel Gomme-Duncan: While thanking the right hon. Gentleman for that reply, and drawing his attention, with great respect, to the fact that he gets no money except from the Treasury, may I ask whether, if we give £770,000 for a fun fair in Battersea, a very practical proposal such as that made by this society should not have a similar grant?

Mr. MacLeod: As members of this society acquired land in Wester Ross, would the Secretary of State see that the local authorities are consulted before any decision is taken to give a grant?

Mr. Woodburn: The society did send some people to Wester Ross, but that was not the responsibility of the Secretary of State. Land settlement in Scotland is within the province of the Secretary of State, but it is possible for people to do it privately, as the hon. Member is aware, without consulting either the county council or the Secretary of State. In that particular case I have seen the report in the Press that there was some resentment among the local people at this "invasion," as they called it, and that the people concerned have now retired.

Oral Answers to Questions — MINISTRY OF PENSIONS

Disabled Persons (Tricycles)

Mr. Sidney Shephard: asked the Minister of Pensions the conditions under which a disabled person may qualify for an invalid tricycle.

The Minister of Pensions (Mr. Marquand): A disabled pensioner may qualify for an invalid tricycle if he has suffered amputation of both legs, one amputation being above the knee, or is suffering from paraplegia or his disability results in total or almost total loss of the use of his legs, or he is so badly disabled as to need a machine in order to obtain or retain employment.

Mr. Shephard: Can the Minister say how many applications for these tricycles

have been received, how many have been granted, and how many tricycles have been issued up to date?

Mr. Marquand: I should require notice of that question. The tricycles are available under the National Health Service as well as under this scheme for war pensioners.

Squadron-Leader Fleming: In a case where a disabled person has applied for a motor car and that application has been refused, is he bound to apply a second time for a tricycle?

Mr. Marquand: I should think that where a person has applied for a motor car and has been told that he is not eligible, at the same time he would be told whether he is eligible for a tricycle.

Captain John Crowder: Is the Minister satisfied that these three-wheeled vehicles are as safe as motor cars? Is it not a fact that they turn over much more easily?

Mr. Marquand: There is another Question on the Order Paper which, I think, will answer that point.

Mr. Peter Freeman: Are the conditions for the issue of self-propelled invalid chairs the same as those for the issue of tricycles?

Mr. Marquand: Invalid chairs can be provided instead of tricycles, if preferred, or they can be provided subject to approval by my medical advisers where considered necessary.

Mr. Shurmer: On a point of Order, Mr. Speaker. Might I call attention to a lady using opera glasses in the Gallery?

Mr. Charles Smith: asked the Minister of Pensions whether he will make a statement on the proposals of his Department for a new type of enclosed motor tricycle for disabled persons.

Mr. Marquand: The new type of motor tricycle embodies a number of new features based on experience of the special needs of seriously disabled persons. Complete weather protection is provided. The tricycle has a hood which can be easily opened or closed by the seated driver. A very wide door makes it easy for the disabled man to get in and out. Special attention has been paid to the springing of the chassis and upholstery in order to give maximum insulation from


road shocks and engine vibration. All the controls are hand operated, the throttle and brake controls being on the steering wheel, which is of the aircraft type. The machine is fitted with a self-starter. It has good hill climbing qualities. At the back there is an enclosed compartment containing a folding hand-propelled chair. The tricycle has been driven in the course of its tests by seriously disabled men who have testified to its comfort, and to the ease with which it can be driven.

Mr. Smith: While we appreciate the action of the Ministry in effecting these improvements in design, can my right hon. Friend say anything about the relative cost of one of these improved tricycles and one of the cars which his Ministry have issued? In view of the obviously great superiority of the motor car, can he not declare that it is his ultimate policy to extend the issue of cars to all categories of disabled persons who will qualify for the motor tricycle under the present plan?

Mr. Marquand: No, Sir. The tricycles are provided now. They are being issued continuously. An improved version is being provided. In addition, I have been able to provide, as I have already said more than once, not more than 1,500 motor cars over a period of two years. Questions about what might happen at the end of that time might more appropriately be put within a few months of the expiry of those two years, and not now.

Mr. Cecil Poole: Would my right hon. Friend consider placing on view somewhere in the precincts of the Palace of Westminster one of these motor tricycles so that hon. Members can see what his Department are doing for the disabled ex-Service man?

Mr. Marquand: If I were aware of a general demand for that, I should gladly do so.

Mr. Joynson-Hicks: When is it hoped to start the issue of the new type of motor tricycle?

Mr. Marquand: I answered a Question on that point a week or two ago. Certainly by the end of the year: I hope before.

Mr. Gallacher: As I have written to the Minister on this question, is he not fully aware that many of these crippled men require constant attention, and would it not be desirable to provide small two-seater cars so that the wife or some friend can be with them continuously?

Mr. Marquand: That is one of the reasons why 1,500 four-seater cars are being provided.

Parents' Pensions

Miss Bacon: asked the Minister of Pensions how many pensions are paid to parents of sons and daughters killed during the last war; what is the average amount paid; and what is the highest pension paid.

Mr. Marquand: Approximately 48,000 pensions are being paid to parents in respect of deaths from the 1939–45 war. The average pension is £40 a year, and the highest pension paid is £120 a year.

Miss Bacon: Can my right hon. Friend say how these compare with similar pensions paid after the 1914–18 war?

Mr. Marquand: Not without notice.

Mr. Shurmer: Would my right hon. Friend say whether he has sent to parents a letter similar to that sent to ex-Service men so that they may know the benefits for which they can apply from time to time? If not, will he do so?

Mr. Marquand: No, Sir. I have not sent out any such letter. These pensions are payable in cases of need. It would be impossible for me to circularise all parents all over the country, most of whom, fortunately, are not in need.

Oral Answers to Questions — BRITISH ARMY

Far Eastern Drafts (Training)

Brigadier Peto: asked the Secretary of State for War the conditions of training and of service which have to be fulfilled before a National Service man is ordered to serve in the Far East; and, in particular, the length of unexpired service required prior to embarkation.

Mr. David Renton: asked the Secretary of State for War whether he will give an assurance that no men will be sent to the Far East who have less than nine months' service to complete.

The Secretary of State for War (Mr. Shinwell): As I have stated on a number of previous occasions, a soldier must have completed 16 weeks' training and a total of 18 weeks' service before embarkation for the Far East. As regards the length of unexpired service required prior to embarkation for the Far East, the normal rule is that National Service men must have not less than nine months' unexpired service to complete on arrival in the theatre, that is about 10½ months on embarkation. There are, however, occasions when it is found necessary, owing to operational requirements, to reduce the minimum period of unexpired service on embarkation to about 7½ months. All the men may expect to return to the United Kingdom in time to be released with their age and service groups.

Brigadier Peto: Will the right hon. Gentleman look at a case, if I send it to him, where a man has less than six months to serve before he is to return from Hong Kong?

Mr. Shinwell: If the hon. and gallant Member sends me a case which he wants me to look into, I certainly shall do so.

Mr. Renton: Can the right hon. Gentleman say for what percentage of the total number of men sent out to the Far East this year a period of less than nine months' unexpired service has been accepted by the Army authorities for operational reasons?

Mr. Shinwell: That question ought to be on the Paper.

Mr. Platts-Mills: If I send details of a lad of 17½ who I understand is being sent to the Far East with very much less than 12 weeks' training, will my right hon. Friend look into the matter at pretty short notice?

Mr. Shinwell: There should be no cases, so far as I am aware—certainly, if there are such cases, they are contrary to the instructions I have issued—where men have been sent to the Far East recently without having had 18 weeks' service and a minimum of 16 weeks' training.

Sir Ralph Glyn: In addition to training at home, do men sent out go to a base camp and have further training before being sent up the line?

Mr. Shinwell: Certainly.

Special Campaign Pension

Mr. Francis Noel-Baker: asked the Secretary of State for War why Mr. W. F. Marriott, of 21 British Grove, Chiswick, W.4, has had his special campaign pension, which was granted to him for service during the Boer War, reduced by 5s.; and whether he will now reconsider the policy of applying a means test to such pensioners, in view of their age and loyal service, and of the hardship thus inflicted upon them.

Mr. Shinwell: When Mr. Marriott's old age pension was increased, he ceased to be eligible for special campaign pension under the normal rules, but so much of his special campaign pension has since been continued as is necessary to maintain his income at its former level. This amount was, on recent review, found to be 5s. a week only and his pension was, therefore, reduced to that rate from 1st June, 1949. The answer to the last part of the Question is "No."

Mr. Noel-Baker: May I ask my right hon. Friend two questions? First, was this reduction in this particular pension part of the general arrangement; and secondly, does he not realise that these men regard the reduction as rather mean and cheeseparing, particularly in view of the age of the people concerned and the services they have given to the country, and in those circumstances will he reconsider his plan?

Mr. Shinwell: If I say that this is part of a general arrangement which was agreed a long time ago, I think that would be the complete answer. The persons concerned will not suffer financially or he any worse off than they were before.

Lieut.-Commander Gurney Braithwaite: Is it not a fact that this is a means test of the most tyrannical character?

Mr. Shinwell: No, the fact is that the special campaign pension is itself based on a means test.

Officers, Malaya

Mr. A. R. W. Low: asked the Secretary of State for War whether he is satisfied that officers in Malaya who are required to undertake increased responsibilities in connection with the campaign against the guerillas are given promotion with increased pay.

Mr. Shinwell: Officers in Malaya are serving on standard field force establishments. The gradings of appointments are assessed on a responsibility basis.

Mr. Low: Does that mean that where a post carries a higher responsibility than the substantive rank of the officer carrying out the job, a higher rank or temporary rank can be given?

Mr. Shinwell: If the post carries a higher responsibility, it is generally assumed that it carries a higher rank.

Overseas Service (Medical Categories)

Mr. Renton: asked the Secretary of State for War which medical categories qualify soldiers for service at Hong Kong.

Mr. Shinwell: The fitness of soldiers for service overseas is assessed under the "Pulheems" system of medical classification which has replaced the former medical categories.

Mr. Renton: Would the right hon. Gentleman kindly answer the Question? Even under his new system, there must be some kind of description which can be given and may we have that description?

Mr. Shinwell: The description is all embodied in the term "Pulheems." It is rather complicated, but if the hon. Gentleman is anxious to have a full description and a complete definition of the words represented by the initials contained in the word "Pulheems," I will have it inserted in the OFFICIAL REPORT.

Mr. Hogg: Surely, all we want to know is how physically fit a man has to be before he goes to Hong Kong?

Mr. Shinwell: In order to ascertain whether a man is physically fit, he has to undergo several tests, all of which are contained in the medical classification embodied in the term "Pulheems."

Mr. Frank Byers: Is it not true that the term "Pulheems" means that there are certain categories of the establishment? Are we to take it from the Minister that there are certain categories which mean that men can be sent to the Far East, and certain others which mean that they cannot? May we know which they are?

Mr. Shinwell: Perhaps, in order to satisfy the natural curiosity of hon. Members, I had better explain what the word "Pulheems" means. It starts, as is obvious, with P for physical capacity; U is for upper limbs; L for locomotion; H for hearing; EE for eyesight; M for mental capacity; and S for emotional stability. If a soldier passes this categorical test, he is sent to the Far East.

Mr. Emrys Hughes: Would the problem not be solved by allowing only volunteers to go to Hong Kong?

Mr. Shinwell: If the hon. Member wishes to volunteer himself. I will consider it.

Colonel Gomme-Duncan: Can the right hon. Gentleman say what comes out at the end of this? Is it a soldier, or what?

Mr. Shinwell: It is obvious what comes out at the end. There comes out at the end a person who emerges having satisfied the full medical requirements of the Army.

Mr. Renton: Will the Secretary of State ask his right hon. Friends voluntarily to undergo this test?

Mr. Shinwell: This is really not a matter for me to consider, though if hon. Members generally wish to undergo this test, I will see what I can do.

Nurses (Conditions and Pay)

Brigadier Head: asked the Secretary of State for War whether he is satisfied with the present strength of the Queen Alexandra's Royal Auxiliary Nursing Corps; and when he expects to make an announcement regarding the new conditions of service and pay of this corps.

Mr. Shinwell: The answer to the first part of the Question is "No." The Army, like the civil hospitals, is having considerable difficulty in securing the services of nurses. The strength of the Queen Alexandra's Royal Army Nursing Corps is more than 900 below establishment and civilian nurses are being employed as a temporary expedient. I hope that it will be possible for a statement on the new conditions of service to be made shortly.

Brigadier Head: Is the Secretary of State aware that an inquiry into the pay


and conditions of service of these nurses was started in December, 1946, and that, in February of this year, he said he would expedite the matter? Is he also aware that this delay is having a most unfortunate effect on those in the service and on recruiting as a whole?

Mr. Shinwell: The first two parts of the hon. and gallant Member's supplementary question are accurate. With regard to the third, it is not having such an unfortunate effect as was anticipated, very largely because of the devotion to duty and loyalty of the nurses.

Mr. Low: Can the right hon. Gentleman say whether civilian nurses are paid more or less than Army nurses?

Mr. Shinwell: As hon. Members are probably aware, there has been recently some suggested readjustment of pay and conditions of civilian nurses, and we are hoping for the best.

Brigadier Head: Is the Secretary of State aware that devotion to duty would be much assisted by better conditions of pay than they have at present?

Mr. Shinwell: I am aware of that, and hon. Members are pushing at an open door.

Parade Regulations

Mr. Emrys Hughes: asked the Secretary of State for War what are his regulations dealing with the action to be taken when soldiers faint on parade.

Mr. Shinwell: There are no specific orders laid down. Such matters are left to the discretion of the officer commanding the particular parade. The normal practice is for the nearest non-commissioned officer to fall out and detail two other ranks to remove the individual to the rear, loosen the collar and belt, and arrange for medical attention.

Mr. Emrys Hughes: As there are no specific regulations for dealing with these cases, will the right hon. Gentleman consider regulations preventing the recurrence of the incident which occurred at Shrewsbury last week, where a woman was left helpless on the ground and a photograph was taken of her?

Mr. Shinwell: So far as the photograph of the incident is concerned, I regard it as regrettable. It was of no advantage

to anybody. As regards dealing with the soldier, or whatever rank is held by the unfortunate individual who suffers this discomfort, we must leave it to the discretion of the commanding officer, who is responsible.

Mrs. Mann: Does not my right hon. Friend agree that the photograph was a correct portrait of what actually took place, and that the "couldn't care less" expression on the faces of those around this poor girl has been very disturbing? May I further ask him whether any penalty attaches to a woman who goes to the rescue or assistance of another in such circumstances?

Mr. Shinwell: I must reject the suggestion that the comrades of this sergeant who suffered in this fashion were unconcerned. They were very much concerned about their colleague, but naturally fainting is usually unexpected and it is not very easy to decide what should be done.

Mr. Tolley: Will my right hon. Friend refute or comment on the suggestion that any person in that condition cannot be dealt with until the review has ended?

Mr. Shinwell: This is a matter which must be left to the discretion of the commanding officer, and it is quite impossible for me to interfere in matters of this sort. All I wish to repeat is that I think it is deplorable that an incident of this kind should have been depicted in the Press in the way it was.

Reserve (Strength)

Major Legge-Bourke: asked the Secretary of State for War what were the strengths of sections A, B and D, respectively, of the Army Reserve on 1st January, 1938.

Mr. Shinwell: Four thousand, seven hundred and ninety-nine, 79,917 and 40,232 respectively.

Major Legge-Bourke: Is the right hon. Gentleman aware that if his Parliamentary Secretary had had the courtesy to answer the Question I asked him last week, I need not have bothered him for these figures?

Mr. Shinwell: I will not accept that at all. The Parliamentary Secretary is most courteous in his replies to Questions.

Oral Answers to Questions — TOWN AND COUNTRY PLANNING

Development Charge

Mr. Stokes: asked the Minister of Town and Country Planning what development charge will be paid by the British Electricity Authority to the Central Land Board on account of hydroelectric development in North Wales.

The Parliamentary Secretary to the Ministry of Town and Country Planning (Mr. King): As my right hon. Friend told the House on 28th June, the proposals will have to be submitted to Parliament in a Private Bill. Until the details of the scheme have been settled, the Central Land Board cannot determine what development charge will be payable.

Mr. Stokes: Is it quite clear that a development charge will be paid to the Central Land Board?

Mr. King: Yes, I endeavoured to make that clear. A development charge is payable in these circumstances.

North Staffordshire (Survey)

Mr. A. Edward Davies: asked the Minister of Town and Country Planning what is holding up the publication of the survey of North Staffordshire expected by the end of last year; and when it will be available.

Mr. King: My right hon. Friend has not yet received the whole of the consultants' report. He is, however, arranging for advance copies of the planning proposals to be duplicated and sent to the planning authorities as soon as possible.

Mr. Davies: Is the Minister aware that on 25th May, 1948, his right hon. Friend said that he understood the work was proceeding steadily and that it was hoped to finish it by the end of October, but that we are still without the information?

Mr. King: The work has proceeded; it is the publication and printing of the copies which sometimes takes time, but the survey should be in my hon. Friend's hands shortly.

Refuse Tipping, Ditton Common

Mr. Skeffington-Lodge: asked the Minister of Town and Country Planning whether his attention has been drawn to the proposal of Esher Urban District Council for controlled tipping of refuse on Ditton Common, Surrey; and whether, as this area is a natural and charming open space which will be spoilt if this proposal is carried out, he will intervene with the object of preserving it.

Mr. King: I have seen reference to the proposal in the Press. Any such proposal would, however, have to be submitted to the Surrey County Council as local planning authority, and I understand that that has not yet been done. Until that is done and the county council have had an opportunity of considering it, I can express no opinion. My right hon. Friend will keep in close touch with the county council about it.

Mr. Skeffington-Lodge: Is there anything that my hon. Friend can do to persuade these Conservative-controlled local authorities to be more public-spirited when matters of this kind come before them?

Mr. King: Irrespective of the merits of this question, to turn Conservative into progressives is always very difficult, and sometimes impossible.

Captain Marsden: Is the Parliamentary Secretary aware that the hon. and gallant Member for Chertsey has already written to him and to the county council about this; and when it comes before him will he give a rather more definite and satisfactory answer than he has given now as to the action he will take?

Mr. King: It is not our function to answer such questions, but for the local authorities to take such action in the first instance, and we cannot interfere until they do so.

Mr. Erroll: Will the hon. Member for Bedford (Mr. Skeffington-Lodge) consult with the hon. Member for Ince (Mr. T. Brown) about asking questions concerning other Members' constituencies?

Oral Answers to Questions — NATIONAL INSURANCE (OLD AGE PENSIONERS)

Mr. Thomas Brown: asked the Minister of National Insurance whether the National Assistance Board have now


given consideration to a revision of the membership of the local advisory committees which will have to deal with the level of rents charged to old age pensioners, as steps in this direction were promised by the National Assistance Board on 22nd April, 1949, in a letter sent to the hon. Member for Ince, consequent upon a deputation which awaited upon the National Assistance Board on 30th March. 1949.

The Minister of National Insurance (Mr. James Griffiths): As my hon. Friend is aware, the membership of the Board's advisory committees is to be linked with that of the advisory committees which I am setting up under the National Insurance Act. Active steps are now being taken to reconstitute the Board's committees with this end in view and invitations to nominate suitable persons have been sent to local authorities and other bodies. As regards rent, the Board inform me that pending further advice from the committees their officers are exercising their discretionary powers to make additions where necessary in cases not covered by the present rules.

Mr. Brown: Can my right hon. Friend tell the House how many secret instructions have been issued by the National Assistance Board on this particular subject, and what those secret instructions contain? Furthermore, will he consider representations from the British Federation of Old Age Pensioners when setting up the local advisory committees?

Mr. Griffiths: I do not agree that there are any secret instructions. The rent rule which is operated by the Assistance Board is the rule devised by these committees. The Board agree that it is now time to revise these rules, and that is why they propose to ask these committees, as soon as they are constituted, to look at the rent rules they are now operating and to make any recommendations necessary.

Mr. Brown: With the first point I agree, but is my right hon. Friend aware that, pending the setting up of these advisory committees, secret instructions are being sent out by the Assistance Board informing area officers what they should do despite the regulations now existing?

Mr. Griffiths: The Board's duty is to carry out the regulations; any instructions they give must be instructions as to the carrying out of the regulations.

Mr. John Paton: Can my right hon. Friend give any approximate date as to when the new machinery will be operating?

Mr. Griffiths: Not without notice.

Mr. Carmichael: When these committees are set up, has my right hon. Friend any special method of advising the public about their existence, because that is a very important feature of the matter?

Mr. Griffiths: Yes, Sir. I hope the House will agree that, having regard to the close relationship between the National Insurance Act and the National Assistance Act, it is desirable that we should link up the two advisory committees, and if my hon. Friend will put down a Question, I will give him further details of how we propose to set up these committees and of the publicity we shall give to their work.

Oral Answers to Questions — FESTIVAL OF BRITAIN

Mr. Lipson: asked the Lord President of the Council if he will invite private firms to provide the fun-fair at Battersea Park for the Festival of Britain so as to avoid the expenditure of public money for this purpose at a time of financial stringency.

The Lord President of the Council (Mr. Herbert Morrison): It is fully intended that most of the fun-fair features of the Festival Gardens in Battersea Park shall be provided by concessionaires who will pay rent for them.

Mr. Lipson: Is the right hon. Gentleman aware of the widespread feeling that, in proposing to embark upon this project, the Government are setting a deplorable example of the foolish spending of public money, and will not he abandon the whole scheme?

Mr. Morrison: No, Sir. In relation to the whole project, this is not a great amount, and there will be revenue both directly and indirectly. The local authorities have been consulted, and, with great


respect to the hon. Member for Cheltenham (Mr. Lipson), the Battersea and Chelsea Borough Councils and the London County Council are the authorities to whom we are entitled to listen about it.

Mr. Wilson Harris: Would not Battersea Park serve a much better purpose as a place of rest and recuperation for persons overstrained by excitements lower down the river?

Mr. Scollan: Is my right hon. Friend aware of the widespread discontent that this announcement has created in Scotland in view of the housing shortage there and the parsimonious treatment given to the housing needs of the West of Scotland?

Mr. Morrison: If Scotland is coming into the picture of how London is to enjoy itself, we are getting rather far. If I may say so, I think my hon. Friend's point is a rather petty one in relation to the bigness of this scheme.

Mr. Henry Strauss: Can the right hon. Gentleman arrange to make known to the public and the House the nature of the permanent changes to be made in the park before the work is started?

Mr. Morrison: As far as I know, no permanent changes are envisaged. If the hon. and learned Gentleman can intimate that there are, I will look into them.

Mr. Strauss: I had in mind the answer given by the right hon. Gentleman on the last occasion when he said that the London County Council might wish to retain as permanent certain alterations about to be made.

Mr. Morrison: That is not a question of permanent changes, but of retaining certain features. The London County Council are the parks authority for London, and their rights and discretion must be respected.

Mr. Speaker: This is a little wide of the original Question which was, after all, whether private firms would be invited to do this work, and not a Question about general policy.

Mr. Stokes: Is it not a fact that the scheme is very nearly self-liquidating, and that there is nothing to worry about?

Mr. Morrison: Broadly speaking, my hon. Friend is quite right.

Oral Answers to Questions — NATIONAL FINANCE

Unpaid Services (Expenses)

Mr. Erroll: asked the Chancellor of the Exchequer if his regulations permit private individuals performing unpaid services for the Government to deduct any expenses necessarily and exclusively incurred in the performance of these services from other sources of personal income.

The Chancellor of the Exchequer (Sir Stafford Cripps): No, Sir. I should add that individuals who undertake unpaid work for the Government can claim reimbursement of their out-of-pocket expenses in accordance with the scale laid down for unpaid members of Royal Commissions and Government Committees.

Mr. Erroll: Are the right hon. and learned Gentleman's regulations adhered to in this matter?

Sir S. Cripps: As far as I am aware, yes.

Mr. Erroll: asked the Chancellor of the Exchequer whether members of the Committee on Resale Prices Maintenance will, for taxation purposes, be permitted to charge personal expenses incurred in connection with this Committee against other sources of income.

Sir S. Cripps: I cannot answer Questions relating to the tax liability of particular individuals.

Synthetic Oil Plants (Germany)

Mr. Stokes: asked the Chancellor of the Exchequer if he will give an estimate of the number of dollars which could be saved to the sterling area were the synthetic oil plants in Germany worked to capacity instead of being dismantled and the output either sold in dollar territories or used to save dollar purchases.

Sir S. Cripps: None, Sir.

Marshall Plan (Obligations)

Mr. Platts-Mills: asked the Chancellor of the Exchequer what representations have been received from the Chairman of the Council of the Organisation for European Economic Co-operation expressing the view that Great Britain


was not carrying out any of the undertakings on financial and monetary stabilisation to which the country has been pledged, consequent on the adherence by His Majesty's Government to the Marshall Plan; and what replies have been made.

Sir S. Cripps: None, Sir.

Mr. Platts-Mills: is it not the duty of the Chairman of the Council of O.E.E.C., under proposal 1 of the principles and proposals of the plan of action, 1949–50, adopted by the council of O.E.E.C. in March, 1949, Annex C, to receive my right hon. Friend's report and then to discuss it with him; and is his failure to bring forward proposals for this discussion due to the fact that the Americans are apprehensive that we are in such a fix that Mr. Snyder himself is coming to this country to engage in this discussion?

Sir S. Cripps: No, Sir.

Trade With Japan (Dollars)

Mr. Harold Davies: asked the Chancellor of the Exchequer if he will guarantee that no dollar leakages have taken place as a result of the trade agreement with Japan.

Sir S. Cripps: It was agreed by the Supreme Commander for the Allied Powers that the sterling area should be reimbursed in dollars for any unprocessed goods sold to Japan which had cost dollars; and that except by special arrangement with us Japan would not resell goods obtained from the sterling area. There is no reason at all to suppose that these undertakings have not been fully carried out.

Mr. Davies: Has my right hon. and learned Friend any idea of the amount of dollars which have been leaking through this Japanese trade agreement?

Sir S. Cripps: The answer I have just given shows that my idea is that there is no leakage.

Fiduciary Issue

Sir Waldron Smithers: asked the Chancellor of the Exchequer why he has agreed to the increase of the fiduciary issue by the Bank of England by £50 million.

Sir S. Cripps: For the reason given in the answer to my hon. Friend the Member for Aberdare (Mr. D. Thomas) and my hon. Friend the Member for Chesterfield (Mr. Benson) on 5th July.

Sir W. Smithers: Does not the right hon. and learned Gentleman realise that he is adopting Soviet technique in this matter by saying one thing and doing the opposite? He is warning the country against inflation and then bringing in 50 million more bits of paper.

Sir S. Cripps: Perhaps the hon. Member will read the answer.

Sterling Balances (Palestine)

Mr. A. R. W. Low: asked the Chancellor of the Exchequer what was the sterling balance of the former Palestine Government on 15th May, 1948; and how much of this balance had been earmarked for the successor Government of the area allotted by the United Nations resolution to the Arabs.

Sir S. Cripps: In so far as the hon. and gallant Member's Question relates to sterling balances in the accepted sense, I would refer him to the reply given to the hon. Member for Mile End (Mr. Piratin) on 27th May, 1948. These sterling balances are almost entirely the counterpart of liabilities, such as Palestine Currency Board notes and deposits in banks, the location of the owners of which is a matter of fact. No question of earmarking by territories therefore arises. On the other hand, the allocation of sterling assets of the former Mandatory Government of Palestine will be discussed with the Government of Israel in talks now proceeding at Tel Aviv and with any Arab successor Government.

Mr. Low: Will the Chancellor give an assurance that, in the course of the negotiations now proceeding with the Government of Israel, he will not prejudice the position of any future Arab Government?

Sir S. Cripps: That is what we shall attempt.

Mr. Ivor Thomas: Will the right hon. and learned Gentleman assure us that Jacob has not once more stolen his brother's birthright?

Mr. Hogg: Will the right hon. and learned Gentleman assure us that in any


arrangement which is ultimately arrived at the acceptance of the assets will be coupled with a duty to discharge outstanding responsibilities?

Sir S. Cripps: That is one of the matters, of course, which we are discussing.

Income Tax

Mr. Douglas Houghton: asked the Chancellor of the Exchequer how many employers, as at any recent date, were known to the Income Tax authorities to be holding money deducted by them from the wages and salaries of their employees under Pay-As-You-Earn more than six months previously; and what is the estimated amount involved.

Sir S. Cripps: On 27th September, 1947, the latest date for which precise information is at present available, the amount of tax deducted for 1946–47 and earlier years and reported by employers but not paid over by that date was £627,000. No information is available centrally either as to the number of employers involved or as to tax which may have been deducted but not reported by that date.

Sir W. Smithers: asked the Chancellor of the Exchequer why tax reclaimed by persons with incomes derived from England living in Jersey is still six months and more overdue in repayment.

Sir S. Cripps: If the hon. Member will give me particulars of the cases he has in mind, I will have inquiries made and communicate with him as soon as possible.

Mrs. Ridealgh: asked the Financial Secretary to the Treasury whether his regulations permit a person denied compensation for war damage, due to a too late claim, to claim Income Tax relief on the amount paid in respect of war damage repairs to his property.

The Financial Secretary to the Treasury (Mr. Glenvil Hall): In the circumstances described in my hon. Friend's Question, the cost of the repairs may be included in a claim for relief under Rule 8 of No. V of Schedule A of the Income Tax Act, 1918, if the total expenditure on maintenance, repairs, etc., to the property, on the five years' average, exceeds the flat-rate repairs allowance.

Mrs. Ridealgh: Will my right hon. Friend then explain why, if these war

damage repairs have not been accepted, ordinary repairs have been accepted in this way?

Mr. Glenvil Hall: If my hon. Friend will send me the particulars of any case she has in mind, I will certainly have them looked into.

Houses (Sale Prices)

Mrs. Jean Mann: asked the Chancellor of the Exchequer if he is aware of the profiteering in the prices of houses for sale with vacant possession; and whether he will consider imposing a substantial Purchase Tax on such sales.

Sir S. Cripps: The Purchase Tax could not be used as an instrument for imposing a tax on the seller of a house.

Mrs. Mann: Could not my right hon. and learned Friend find some other method of dealing with this exploitation?

Sir S. Cripps: I have answered the Question I was asked, which was whether we could use Purchase Tax for the purpose.

Mr. Ronald Chamberlain: If Purchase Tax is not available for the purpose, should not the Chancellor of the Exchequer think in terms of some form of capital appreciation tax, because millions are slipping by in this and other connections at a time when he is scratching around for a million here and there.

Mr. Hector Hughes: Does not my right hon. and learned Friend think that this problem might at least be mitigated by some differential form of Stamp Duty? Is he aware that it has become a national scandal?

Sir S. Cripps: I am afraid I cannot answer questions that are not on the Order Paper.

Travellers' Cheques, France

Mr. Keeling: asked the Chancellor of the Exchequer if he is aware of the difficulties experienced by British travellers in cashing travellers' cheques in France; and if he will make representations to the French Government with a view to a simplification of their exchange procedure.

Sir S. Cripps: I do not think that the difficulties reported in the Press have been on a large scale or are persisting.


Willingness to cash any particular traveller's cheque is a matter for the bank concerned and there is no reason to make representations to the French Government.

Post-War Credits

Mr. Douglas Houghton: asked the Chancellor of the Exchequer how far the Post-War Credits of the ex-Service men concerned will be reduced or extinguished by the remission of arrears of tax under the recently-made concession.

Sir S. Cripps: The amount of a Post-War Credit for any year is computed by reference to the tax borne for that year. Consequently, to the extent that tax is remitted for any year, the Post-War Credit for that year is less by that amount.

Mr. Houghton: Will my right hon. and learned Friend say whether he took the post-war set-off into account in giving the Committee an estimate of the cost of this remission?

Sir S. Cripps: In the estimate of the cost, I do not think it had been taken into account.

War Damage (Late Claims)

Mr. Francis Noel-Baker: asked the Chancellor of the Exchequer to state for the guidance of those persons still negotiating with the War Damage Commission, what factors are taken into consideration when deciding whether a late notification is due to most exceptional circumstances; and whether dangerous and nerve-straining rescue work with the Civil Defence service at the time of an incident is included in this category.

Sir S. Cripps: I would refer my hon. Friend to the answer given to a similar Question on 25th January, 1949.

Mr. Noel-Baker: Is my right hon. and learned Friend aware that the undiplomatic and sometimes arbitrary behaviour of the War Damage Commission is causing great distress to many deserving people, and will he ask them to be a little more sympathetic in cases of this kind? Could he not, perhaps, himself give a more sympathetic answer?

Sir S. Cripps: I think they are extremely sympathetic. On many occasions I have

looked into this matter and discussed it with various Members of the House of Commons.

Mrs. Middleton: Is not my right hon. and learned Friend aware that on both sides of the House there are many Members who can bear out from their personal experience the views which have been put to him by my hon. Friend the Member for Brentford and Chiswick (Mr. F. Noel-Baker)?

Bonus Share Issues

Mr. Ronald Chamberlain: asked the Chancellor of the Exchequer how many applications for permission to issue bonus shares have been received by the Capital Issues Committees since 6th April, 1949; how many have been sanctioned; how many refused; and what was the aggregate nominal value in each case.

Sir S. Cripps: Up to and including 6th July, 116 applications had been received to a nominal amount of £43,381,021; of these 115 had been sanctioned to a nominal amount of £43,231,021; one had been refused, nominal value £150,000.

Mr. Chamberlain: Does not that reply show that there is really no proper control being exercised if 115 out of 116 have been allowed, with £43 million as the nominal value and undoubtedly twice that amount as the market value? Is it not time this racket stopped?

Sir S. Cripps: No, Sir. It shows that applications have been made only in proper cases.

Tax Forms (Welsh Language)

Mr. Emrys Roberts: asked the Chancellor of the Exchequer whether he will arrange for letters or notes of guidance as to Income Tax papers to be written in the Welsh language in Welsh-speaking areas.

Sir S. Cripps: I am advised that the use of English in Income Tax forms, notes for guidance, and correspondence does not give rise to special difficulties in Wales. Accordingly, I do not consider that the additional expenditure which would be involved would be justifiable. As my hon. Friend will be aware, the staff in appropriate tax offices in Wales includes Welsh-speaking officials and, if need be, correspondence can be conducted in Welsh.

Mr. Roberts: Does not the Chancellor appreciate that it is very difficult for persons who primarily speak and write Welsh to follow these difficult matters? Could he give some estimate of the cost involved in sending out Welsh circulars in the Welsh-speaking areas?

Sir S. Cripps: No, Sir; I have not an accurate estimate. I am quite sure, however, that by having Welsh-speaking officers any difficulties can be overcome far better than by having Welsh documents.

Import, Export and Customs Powers Act, 1939

Sir J. Mellor: asked the Chancellor of the Exchequer when an Order in Council will be made declaring the date on which the emergency, that was the occasion of the passing of the Import, Export and Customs Powers (Defence) Act, 1939, came to an end; and why the said Act had been retained in force for an emergency of an entirely different character.

Sir S. Cripps: I cannot accept the implication in the Question that the emergency which was the occasion of the passing of this Act has come to an end. Accordingly, no question of making an Order in Council need arise at present.

Sir J. Mellor: Can the right hon. and learned Gentleman distinguish between the emergency occasioned by the outbreak of war and the emergency occasioned by the outbreak of the fifth year of the Socialist Government?

Oral Answers to Questions — TATE GALLERY (ENTRANCE CHARGES)

Mr. Piratin: asked the Financial Secretary to the Treasury what are the entrance charges to the Tate Gallery for adults and children.

Mr. Glenvil Hall: There are no entrance charges to the Tate Gallery to view the permanent collections. The charge to visitors to the temporary Exhibition of the Art Treasures from Vienna, now on view in certain rooms of the Gallery, is 1s. 6d. for adults and 9d. for children.

Mr. Piratin: Is not the Financial Secretary aware that this is rather an

exorbitant charge, especially for working-class people, and will he look into it to see whether the charge can be reduced in order to attract more people?

Mr. Glenvil Hall: The difficulty is that special exhibitions coming here from abroad involve considerable expense. The British Council is running this exhibition and, in view of that fact, I do not think the amount they charge is unreasonable.

BUSINESS OF THE HOUSE

The Lord President of the Council (Mr. Herbert Morrison): It will be necessary to make an alteration in the Business announced for tomorrow, and I hope to have the co-operation of the House in this matter in the new circumstances. We propose to take Business tomorrow in the following order:
Consideration of His Majesty's Message relating to the state of emergency, and of the Motion to approve the Regulations made under the Emergency Powers Act, 1920.
We then hope that it will be possible to obtain the Second Reading of the Criminal Justice (Scotland) Bill [Lords] and the Committee stage of the necessary Money Resolution; the Report and Third Reading of the Housing (Scotland) Bill; the Committee stage of the National Parks and Access to the Countryside [Money] (No. 2) Resolution; and to consider the two Motions on the Paper relating to National Service (Adaptation of Enactments) Orders.
On Friday, in addition to the Business already announced, we hope that there will be time to consider the Report and Third Reading of the Airways Corporations Bill.

Mr. Gallacher: In view of the fact that I went out, in answer to a message, at 3 o'clock and saw what looked like a meeting of the usual channels out there in the Lobby—I nearly introduced myself but felt I should not be welcome—[HON. MEMBERS: "Speech."]—what I want to know is, How is the discussion going to be conducted tomorrow? As a rule we get a Motion of this kind which is spoken to by a Minister, and then we have the same speech made by the Leader of the Tory Party, and the same speech by the


Leader of the Liberal Party, and then, possibly, at some time someone who opposes may also be called. I want to ask the Leader of the House whether he will consider making a statement on this Message from the King and then arranging, otherwise than through the usual channels, that those who are opposed—

Mr. Speaker: The hon. Member is talking of my business. I select the speakers, and I trust I shall choose fairly tomorrow. It has nothing to do with the Leader of the House or the Leader of the Opposition. It is my business the hon. Member is talking about.

Mr. Gallacher: I was asking a question of the Leader of the House.

Mr. Thurtle: On a point of Order. Is it in Order for an hon. Member to seek to get from you, Mr. Speaker, a statement before a Debate takes place that he is to be called?

Mr. Speaker: The hon. Member must wait and see. As I have said, I always try to see that all points of view are represented in a Debate.

Mr. Gallacher: I am sorry if I have been misunderstood. I was addressing those remarks to the Lord President. I was asking the Leader of the House whether after he has made his statement in support of the Message from the King, he will arrange for those who are opposed—and there is a number of Members who are opposed: I am not speaking of myself.

Mr. Speaker: The Leader of the House cannot arrange that. That is my business. It has nothing to do with the Leader of the House at all.

Mr. Gallacher: I want to be clear on this. Is it not the practice—I do not say, of course, that you have not the power to decide, Mr. Speaker—but is it not the case that through the usual channels arrangements of this kind can be made, and that you follow?

Mr. Speaker: No, certainly not. I do not approve of arrangements between the Front Benches. Often back benchers are "done" in that way. So far as I am concerned, it is going to be my selection and that of nobody else.

Mr. Thurtle: Is not the very suggestion that arrangements can be made, a reflection on the Chair?

Mr. Gallacher: The hon. Member is "nuts."

Mr. Speaker: Such arrangements are not made with my approval.

STRIKE, LONDON DOCKS

The Minister of Labour (Mr. Isaacs): I feel that I should inform the House that the position at the London Docks has not improved. The latest reports show that the number of men on strike totals 12,710. Some of these men, undoubtedly, failed to attend because of a misunderstanding of the position following the introduction of emergency powers, but the National Dock Labour Board has issued a notice in the following terms, which, I hope, will put the matter right. The notice is as follows:
The National Dock Labour Board notes that in some parts of the Port some dock workers have not returned to work in the mistaken belief that since the introduction of emergency powers the dock labour scheme no longer applies. The Board announces that the scheme is still in operation, and dock workers should continue, therefore, to make themselves available for work at the normal times and places in accordance with the scheme.

Mr. Eden: I did not ask a question today because we are to have a Debate on this matter tomorrow, but since the right hon. Gentleman has made that statement, may I ask whether he has given any further consideration to the suggestion that I and other hon. Members made, yesterday, for making the information available to these men more satisfactorily than seems to be the case at the present time? It seems that this is just one more example of a misunderstanding, apparently. I should have thought that it might have been avoided. Have the Government given further consideration to my suggestion, that by means of the wireless or otherwise all the information is made available to these men?

Mr. Isaacs: Yes, Sir, the right hon. Gentleman's suggestions have been considered, and steps will be taken, but for the moment I could not say exactly when.

Mr. Eden: Or what?

Mr. Platts-Mills: Is it still not a fact that all the men are still anxious and willing to work every ship in the docks except the two in dispute?

Mr. Sydney Silverman: Would my right hon. Friend consider, since he concedes that there is some force in the suggestion that further explanations should be given, that the sooner they are given, if they are to be given at all, the better?

EMERGENCY REGULATIONS (COMMITTEE)

The Minister of Transport (Mr. Barnes): I am now able to announce the names of the members of the Emergency Committee which I am setting up under the Emergency Regulations, 1949. The Chairman of the Committee is Sir Alexander Maxwell, lately Permanent Under-Secretary of State at the Home Office. The other members are Mr. C. N. Gallie, Sir Thomas Gardiner, Sir Frederick Leggett, and Mr. W. G. Weston. The Committee will be responsible for discharging the duties set out in the Regulations.

Mr. Henderson Stewart: In view of the fact that the Smithfield branch of the Transport and General Workers' Union this morning decided they would not handle meat brought to the market by the troops, is it the Minister's intention to extend the function of this new Committee to cover Smithfield?

Mr. Barnes: I would suggest that we do not anticipate difficulties of this kind. They can legitimately be considered in the general Debate tomorrow.

Mr. Gallacher: Has the Minister taken very great care to see that no Communists have got on that Committee?

Mr. Barnes: My hon. Friend can very well depend on that.

BUSINESS OF THE HOUSE

Motion made, and Question put,
That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House)."—[Mr. H. Morrison.]

The House divided: Ayes, 253; Noes, 119.

Division No. 207.]
AYES
[3.40 p.m.


Adams, Richard (Balham)
Colman, Miss G. M.
Gooch, E. G.


Albu, A. H.
Cook, T. F.
Greenwood, Rt. Hon. A. (Wakefield)


Allen, A. C. (Bosworth)
Cooper, G.
Greenwood, A. W. J. (Heywood)


Allen, Scholefield (Crewe)
Cripps, Rt Hon. Sir S.
Grenfell, D. R.


Alpass, J. H.
Crossman, R. H. S.
Grey, C. F.


Anderson, F. (Whitehaven)
Cullen, Mrs.
Grierson, E.


Attewell, H. C.
Daggar, G.
Griffiths, D. (Rother Valley)


Austin, H. Lewis
Daines, P.
Griffiths, Rt. Hon. J. (Llanelly)


Awbery, S. S.
Davies, Edward (Burslem)
Griffiths, W. D. (Moss Side)


Ayles, W. H.
Davies, Ernest (Enfield)
Haire, John E. (Wycombe)


Bacon, Miss A.
Davies, Harold (Leek)
Hall, Rt. Hon. Glenvil


Balfour, A.
Davies, Haydn (St. Pancras, S. W.)
Hamilton, Lieut.-Col. R.


Barnes, Rt Hon. A. J.
Deer, G.
Hardy, E. A.


Barton, C.
Delargy, H. J.
Harrison, J.


Battley, J. R.
Dobbie, W.
Henderson, Joseph (Ardwick)


Bechervaise, A. E.
Dodds, N. N.
Herbison, Miss M.


Benson, G.
Driberg, T. E. N.
Hewitson, Capt M.


Binns, J.
Dugdale, J. (W. Bromwich)
Holman, P.


Blyton, W. R.
Dumpleton, C. W.
Holmes, H. E. (Hemsworth)


Boardman, H.
Dye, S.
Houghton, A. L. N. D.


Bottomley, A. G.
Ede, Rt. Hon. J. C.
Hoy, J.


Brook, D. (Halifax)
Edelman, M.
Hughes, Emrys (S. Ayr)


Brooks, T. J. (Rothwell)
Edwards, John (Blackburn)
Hughes, Hector (Aberdeen, N.)


Broughton, Dr. A. D. D.
Edwards, Rt. Hon. N. (Caerphilly)
Hughes, H. D. (W'lverh'ton, W.)


Brown, George (Belper)
Edwards, W. J. (Whitechapel)
Hynd, H. (Hackney, C.)


Brown, T. J. (Ince)
Evans, John (Ogmore)
Irvine, A. J. (Liverpool)


Bruce, Maj. D. W. T.
Evans, S. N. (Wednesbury)
Irving, W. J. (Tottenham, N.)


Burks, W. A.
Ewart, R.
Isaacs, Rt. Hon. G. A.


Byers, Frank
Fairhurst, F.
Janner, B.


Callaghan, James
Farthing, W. J.
Jay, D. P. T.


Carmichael, James
Fletcher, E. G. M. (Islington, E.)
Jeger, G. (Winchester)


Castle, Mrs. B. A.
Follick, M.
Jenkins, R. H.


Chamberlain, R. A.
Foot, M. M.
Jones, D. T. (Hartlepool)


Champion, A. J.
Forman, J. C.
Keenan, W.


Chetwynd, G. R.
Fraser, T. (Hamilton)
Kenyon, C.


Cluse, W. S.
Freeman, J. (Watford)
Key, Rt. Hon. C. W.


Cocks, F. S.
Freeman, Peter (Newport)
King, E. M.


Coldrick, W.
Ganley, Mrs. C. S.
Kinley, J.


Collindridge, F.
Gilzean, A.
Kirby, B. V.


Collins, V. J.
Glanville, J. E. (Consett)
Kirkwood, Rt. Hon. D.




Lang, G.
Noel-Baker, Capt. F. E. (Brentford)
Steele, T.


Lavers, S.
Noel-Buxton, Lady
Stewart, Michael (Fulham, E.)


Lawson, Rt. Hon. J. J.
Oldfield, W. H.
Stokes, R. R.


Leonard, W.
Oliver, G. H.
Stross, Dr. B.


Leslie, J. R.
Paget, R. T.
Stubbs, A. E.


Levy, B. W.
Paling, Will T. (Dewsbury)
Summerskill, Rt. Hon. Edith


Lewis, A. W. J. (Upton)
Parker, J.
Sylvester, G. O.


Lewis, J. (Bolton)
Parkin, B. T.
Symonds, A. L.


Lewis, T. (Southampton)
Paton, Mrs. F. (Rushcliffe)
Taylor, R. J. (Morpeth)


Lipson, D. L.
Paton, J. (Norwich)
Taylor, Dr. S. (Barnet)


Lipton, Lt.-Col. M.
Pearson, A.
Thomas, D. E. (Aberdare)


Logan, D. G.
Piratin, P.
Thomas, I. O. (Wrekin)


Longden, F.
Platts-Mills, J. F. F.
Thurtle, Ernest


Lyne, A. W.
Poole, Cecil (Lichfield)
Titterington, M. F.


McAdam, W.
Popplewell, E.
Tolley, L.


McAllister, G.
Porter, E. (Warrington)
Tomlinson, Rt. Hon. G.


McGhee, H. G.
Porter, G. (Leeds)
Vernon, Maj. W. F.


McGovern, J.
Price, M. Philips
Viant, S. P.


McKay, J. (Wallsend)
Proctor, W. T.
Walker, G. H.


McKinlay, A. S.
Randall, H. E.
Wallace, G. D. (Chislehurst)


Maclean, N. (Govan)
Ranger, J.
Wallace, H. W. (Walthamstow, E.)


McLeavy, F.
Reeves, J.
Warbey, W. N.


MacMillan, M. K. (Western Isles)
Reid, T. (Swindon)
Watson, W. M.


MacPherson, Malcolm (Stirling)
Rhodes, H.
Webb, M. (Bradford, C.)


Macpherson, T. (Romford)
Ridealgh, Mrs. M.
Wells, P. L. (Faversham)


Mainwaring, W. H.
Roberts, Goronwy (Caernarvonshire)
Wheatley, Rt. Hon. John (Edinb'gh, E.)


Mallalieu, J. P. W. (Huddersfield)
Robinson, Kenneth (St Pancras, N.)
White, H. (Derbyshire, N. E.)


Mann, Mrs. J.
Rogers, G. H. R.
Whiteley, Rt. Hon. W.


Manning, Mrs. L. (Epping)
Ross, William (Kilmarnock)
Wigg, George


Marquand, Rt. Hon. H. A.
Scollan, T.
Wilkins, W. A.


Mathers, Rt. Hon George
Scott-Elliot, W.
Willey, O. G. (Cleveland)


Mellish, R. J.
Segal, Dr. S.
Williams, D. J. (Neath)


Middleton, Mrs. L.
Sharp, Granville
Williams, J. L. (Kelvingrove)


Monslow, W.
Shinwell, Rt. Hon. E.
Williams, Ronald (Wigan)


Moody, A. S.
Shurmer, P.
Williams, W. T. (Hammersmith, S.)


Morley, R.
Silverman, S. S. (Nelson)
Williams, W. R. (Heston)


Morris, P. (Swansea, W.)
Simmons, C. J.
Willis, E.


Morris, Hopkin (Carmarthen)
Skeffington-Lodge, T. C.
Wise, Major F. J.


Morrison, Rt. Hon. H. (Lewisham, E.)
Skinnard, F. W.
Woodburn, Rt. Hon A.


Mort, D. L.
Smith, C. (Colchester)
Woods, G. S.


Moyle, A.
Smith, Ellis (Stoke)
Wyatt, W.


Nally, W.
Smith, H. N. (Nottingham, S.)
Yates, V. F.


Naylor, T. E.
Smith, S. H. (Hull, S. W.)
Younger, Hon. Kenneth


Neal, H. (Claycross)
Sorensen, R. W.



Nichol, Mrs. M. E. (Bradford, N.)
Sparks, J. A.
TELLERS FOR THE AYES:




Mr. Hannan and Mr. Bowden.




NOES


Agnew, Cmdr. P. G.
Head, Brig. A. H.
Marlowe, A. A. H.


Amory, D. Heathcoat
Headlam, Lieut.-Col. Rt. Hon. Sir C.
Marsden, Capt. A.


Baldwin, A. E.
Henderson, John (Cathcart)
Marshall, D. (Bodmin)


Barlow, Sir J.
Hinchingbrooke, Viscount
Mellor, Sir J.


Baxter, A. B.
Hogg, Hon. Q.
Molson, A. H. E.


Bennett, Sir P.
Holmes, Sir J. Stanley (Harwich)
Moore, Lt.-Col. Sir T.


Birch, Nigel
Hudson, Rt. Hon. R. S. (Southport)
Morrison, Maj. J. G. (Salisbury)


Boles, Lt-Col. D. C. (Wells)
Hurd, A.
Morrison, Rt. Hon. W. S. (Cirencester)


Boyd-Carpenter, J. A.
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Mott-Radclyffe, C. E.


Braithwaite, Lt.-Comdr. J. G.
Hutchison, Col. J. R. (Glasgow, C.)
Nicholson, G.


Buchan-Hepburn, P. G. T.
Jeffreys, General Sir G.
Nield, B. (Chester)


Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)
Joynson-Hicks, Hon. L. W.
Odey, G. W.


Clarke, Col. R. S.
Keeling, E. H.
Peto, Brig. C. H. M.


Conant, Maj. R. J. E.
Kerr, Sir J. Graham
Pickthorn, K.


Cooper-Key, E. M.
Lancaster, Col. C. G.
Ponsonby, Col. C. E.


Crookshank, Capt. Rt. Hon. H. F. C.
Langford-Holt, J.
Prescott, Stanley


Crowder, Capt. John E.
Law, Rt. Hon. R. K.
Ramsay, Maj. S.


Cuthbert, W. N.
Legge-Bourke, Maj. E. A. H.
Rayner, Brig. R.


Darling, Sir W. Y.
Lennox-Boyd, A. T.
Reed, Sir S. (Aylesbury)


De la Bère, R.
Linstead, H. N.
Roberts, H. (Handsworth)


Dodds-Parker, A. D.
Lloyd, Selwyn (Wirral)
Robertson, Sir D. (Streatham)


Drewe, C.
Low, A. R. W.
Robinson, Roland (Blackpool, S.)


Dugdale, Maj. Sir T. (Richmond)
Lucas, Major Sir J.
Sanderson, Sir F.


Eden, Rt Hon. A.
Lucas-Tooth, Sir H.
Scott, Lord W.


Erroll, F. J.
MacAndrew, Col. Sir C.
Shephard, S. (Newark)


Fletcher, W. (Bury)
McCallum, Maj. D.
Shepherd, W. S. (Bucklow)


Fraser, H. C. P. (Stone)
McCorquodale, Rt. Hon. M. S.
Smith, E. P. (Ashford)


Fraser, Sir I. (Lonsdale)
Macdonald, Sir P. (I. of Wight)
Smithers, Sir W.


Galbraith, Cmdr T. D. (Pollok)
McFarlane, C. S.
Snadden, W. M.


Galbraith, T. G. D. (Hillhead)
Mackeson, Brig. H. R.
Spearman, A. C. M.


Gammans, L. D.
Maclay, Hon. J. S.
Stanley, Rt. Hon. O.


Glyn, Sir R.
MacLeod, J.
Stewart, J. Henderson (Fife, E.)


Gomme-Duncan, Col. A.
Macmillan, Rt. Hn. Harold (Bromley)
Stoddart-Scott, Col. M.


Grimston, R. V.
Macpherson, N. (Dumfries)
Strauss, Henry (English Universities)


Hannon, Sir P. (Moseley)
Maitland, Comdr. J. W.
Sutcliffe, H.


Harvey, Air-Comdre, A. V.
Manningham-Buller, R. E.
Taylor, Vice-Adm. E. A. (P'dd't'n, S.)







Teeling, William
Wheatley, Colonel M. J. (Dorset, E.)
Young, Sir A. S. L. (Partick)


Thomas, Ivor (Keighley)
Williams, C. (Torquay)



Thorp, Brigadier R. A. F.
Williams, Gerald (Tonbridge)
TELLERS FOR THE NOES:


Turton, R. H.
Willoughby de Eresby, Lord
Mr. Studholme and


Webbe, Sir H. (Abbey)
York, C.
Mr. Wingfield Digby.


Question put, and agreed to.

Orders of the Day — FINANCE BILL

Order for Third Reading read.—[King's Consent signified.]

3.50 p.m.

The Financial Secretary to the Treasury (Mr. Glenvil Hall): I beg to move, "That the Bill be now read the Third time."
Our Debates on this Bill compared with some that have been held on previous Measures of the same kind have been smooth and peaceful. There will be varying opinions as to why this has been so, but if I might advance my own, I think that it has been due to two causes—the co-operative spirit of my hon. Friends on this side of the House, for which we on the Treasury Bench are grateful; and, secondly, the reasonableness of the proposals it contains which have given the Opposition so little ground for criticism. I have sat through practically all the discussions we have had, and at times have felt both sorrow and admiration for hon. Gentlemen opposite—sorrow that they should have been so hard put to it to find arguments with which to combat the proposals contained in this Measure, and admiration for the fact that, in spite of that, they managed to keep the Debates going through the fairly lengthy sittings we have had.
This is a Third Reading, and that being so, any sustained reference to the economic situation in which we find ourselves would be out of Order. In any event, the opportunity for considering the wider field will present itself within a few days. Nevertheless, in taking our leave of the Bill, which is designed to incorporate our financial policy for the current year, it may not be out of place for me to remind the House of the objectives at which it was aimed. The main basis upon which the proposals of this Bill rest was, in the words of my right hon. and learned Friend the Chancellor of the Exchequer, that the total calls made upon the national income by our different kinds of expenditure should balance against our

income without creating any inflationary pressure. For that purpose he aimed at an overall balance with, in fact, a very modest surplus of £14 million, and a probable true Revenue surplus of £492 million, a figure which, while pretty substantial in itself, indicated a less urgent emphasis upon disinflation than the true Revenue surplus of £684 million realised last year.
It was one of the major objects of the Budget to provide the maximum incentive possible for production. This, as the House knows, took the form of an increase in the initial allowance for depreciation purposes. This further measure of relief and encouragement to industry is certainly no less important and urgent now than it was when it was first mentioned by my right hon. and learned Friend. Recent events, in fact, stress the paramount importance of our export trade, particularly in hard currency markets. Any steps, therefore, that we can take to assist and encourage manufacturers must be a contribution to this most difficult and stubborn problem and help to cheapen production.
Given this notable measure of relief for industry, it is not perhaps surprising that the Budget incorporated few other concessions, and that during our Debates on the Bill my right hon. and learned Friend has had to harden his heart against many of the pleas for remission of taxation which have been made. I am glad that we were able to accept the Amendment which will extend to buildings the improved allowances proposed for research expenditure on plant and machinery, together with the Amendment which will ensure that the increased initial allowance of 40 per cent. will apply to the whole purchase price of a ship delivered on or after 6th April, 1949, even though part of the price may have been paid before that date.
Apart from allowances to industry of one kind or another, our discussions have concentrated in the main round the proposed change in the Death Duties. There has been some unreality about those discussions, particularly those that we had


on the Report stage last night. Two separate issues are involved in these changes, a fact which has not been fully realised by hon. Members opposite. The first issue is the proposal that the three duties should be amalgamated into one, and that the Legacy and Succession Duties should be dropped. There is no doubt that this simplification is desirable. My mind goes back to the Budget Statement of my right hon. and learned Friend, and my recollection of that occasion is that when he announced that he proposed to make this change it was received with universal approval in every quarter of the House. It will lighten the work of all those whose business it is either to draw up wills, that is, testators, solicitors and so forth; administer the assets, that is, the executors; or levy the duty, that is, the Inland Revenue. This is a desirable thing in itself, providing it does not cause injustice in any other directions.
The proof that the consolidation is desirable is that at the present time between 66 and 75 per cent. of testators disregard Legacy and Succession Duties by leaving their legacies free of duty, the duty coming out of the residue. These changes will assist all those in that category who in the past have undoubtedly desired to avoid these two particular duties, or rather one or other of them. Great play has been made during our discussions with the fact that under the new scale the incidence of Estate Duty will be the same for what are called strangers as for the family. It is obvious that if there is only one scale this must be so. In any event, the family does not lose by the change. It is the scales for strangers which have been brought down and not those of the family increased.
As my right hon. and learned Friend pointed out last night, testators will be quite free to take account of the fact that the Estate Duty rates will in future be the same for all bequests. They can adjust legacies which they leave. They may, for example, leave less to cats' homes—a case quoted last night—knowing they will have less to pay in duty than at the present time. It is inevitable that some estates will pay more, because the Succession Duty involved is an entirely separate one. As my right hon. and learned Friend budgeted for £20 million more in a full year from Death Duties, some estates, will, in fact, have to pay more. It has emerged quite clearly during our discussions that this will be

the case in the middle and higher ranges. That is largely due not to consolidation, but to the fact that my right hon. and learned Friend has decided, with the approval of Parliament, to increase the total amount of Death Duties by £20 million in a full year. Even if consolidation had not taken place, these increases in the middle and higher ranges would have taken place because of the changes which my right hon. and learned Friend has made in the overall incidence.
It is unfortunate that the Opposition committed themselves to the assertion that the changes made place a greater burden on the small family estate than hitherto. The fact is that there is no addition at all to the scales for estates up to £17,500. Further, it was the present Government which in an earlier Finance Bill remitted Death Duties entirely on all estates up to £2,000.
Nor is it correct, as some Opposition speakers have said, that the changes placed a new and unfair burden upon agricultural property. Actually, in some instances the reverse is the case. The amount expected to accrue from Death Duties is £185 millions in a full year. Of this sum, agricultural property will find something like £3,300,000; that is to say, of the extra £20 million which my right hon. and learned Friend proposes to raise from this source, that type of estate will find only £300,000, a very modest sum, as all hon. Members will agree when they consider the matter dispassionately. It is impossible to believe that this small addition to what properties of this kind now have to pay will have the effect prophesied by the right hon. Member for Saffron Walden (Mr. R. A. Butler) and others. It certainly will not make all the difference between an estate being continued in its present form or being broken up.
In the field of Customs and Excise the Bill embodies the Budget proposal that the tax on football pools should be increased to 30 per cent., which has excited the pool promoters to indulge in a vast publicity campaign. I am sorry that it has led to an addition to the correspondence of Members of Parliament, but it has not led to the volume which the pool promoters expected. The campaign was short-lived and largely abortive, and I do not think any of us need he unduly alarmed over it. Such figures as we have


so far relate only to the tail end of the last football season and to the relatively small turnover of the pools which, during the off-season, are run on Australian football and on jockeys. The House may be interested to know that the receipts from the duty up to the end of June have amounted to approximately £3¼ million, compared with £2 million for the same period last year. Those figures, as far as they go, provide no support for the fears that an increase in the duty would mean a catastrophic fall in turnover. On this point, therefore, as on others, we may with an easy mind let the Bill go forward.
The change in the Beer Duty seems to have come up to expectations. As my right hon. and learned Friend said in opening his Budget, there has been since the autumn a marked falling off in the consumption of beer. It was partly from a desire to arrest that downward tendency that my right hon. and learned Friend proposed a remission of duty which would enable the brewers to reduce the price of beer by 1d. per pint. Since the Budget, the consumption of beer has increased appreciably. The number of standard barrels used in April and May has been higher than for the corresponding months in 1948. So far, it seems that the reduction of 1d., which was criticised so much during our earlier proceedings, has achieved the objective of stopping the decline in consumption.

Mr. John Lewis: Is my right hon. Friend prepared to say that the fine summer weather has nothing to do with the increase in the volume of beer consumed.

Mr. Glenvil Hall: I thought I had made it clear that I was referring to April and May. Although the present lovely weather has lasted for some weeks, my recollection is that we were not enjoying it in April and May.
Apart from the considerable assistance given to industry in the depreciation allowance and apart from a number of minor procedural reforms, this has been a standstill Budget. The Finance Bill reflects that fact. It has unfortunately not been possible for my right hon. and learned Friend to make concessions on Income Tax and Purchase Tax. The Bill contains nothing which is inconsis-

tent with that flexibility which my right hon. and learned Friend described, in introducing his Budget proposals, as an essential aspect of our planning. I would add that if our finances have, in the coming months, to be adjusted to any new circumstances that may occur, we shall be ready to make that adjustment. In the meantime, I commend this very useful Bill to the House.

4.8 p.m.

Mr. R. A. Butler: The Financial Secretary to the Treasury prided himself on the co-operative spirit of his supporters. It is very easy to be co-operative when you have been gagged and bound. The Financial Secretary knows perfectly well that in order to keep his own supporters quiet the Chancellor deliberately precluded them, in an unprecedented manner, from being able to speak upon the one financial subject, namely, the Purchase Tax, on which they had set their hearts. No doubt, having been cowed, they did not dare to raise their heads again and take any part in the Debate. We pride ourselves that we are a free party and a free section of public opinion. Not being subject to the Draconian methods employed by the right hon. and learned Gentleman, we have attempted to represent the taxpayers in this House, and to apply our minds to the somewhat meagre arguments put forward with such grace and such marked lack of success by the right hon. Gentleman and his Friends.
We have not been able to welcome the Chancellor of the Exchequer very much to our Debates; nor is he here today. I have recently been accused of being ungracious to the Chancellor of the Exchequer, a quality which I cannot recognise in my character—but never mind that. The fact is that we have never mentioned the Chancellor's absence. I say today, quite openly, that we understand the very serious matters which are engaging his attention elsewhere. Nevertheless, it is unfortunate that the powerful interventions which he might have brought to bear upon our Debates have not been possible on these occasions. I do not think that it is right procedure for the Chancellor of the Exchequer to be absent from the Debates upon the Finance Bill. He has left us his fiddlers three, who have struck up a sort of discordant concordat among themselves, and


with the aid of each other—one vituperative, another legalistic, and the third with his usual disarming grace—they have attempted to keep the Opposition quiet. They have not been successful and I would advise them now to send a message to their Chancellor and ask him to come over into Macedonia and help them on a future occasion.
We have taken as much opportunity as we could to stress the dangers of our financial position. We were limited by the scope of the Amendments which it has been possible to put down to the Finance Bill. They have been designed to draw attention to the very high level of taxation—the most stunning in the world—and to the increasing Government expenditure. I realise that I cannot on this occasion go into detail on these matters. I can, however, follow the right hon. Gentleman in his reference to the objective which the Chancellor had in mind in drawing up this Bill, which was to create an overall balance.
I would remind the Financial Secretary and through him the Treasury that, taking the first quarter's figures of the Revenue return, there is at present a net over-all deficit, taking above and below the line items, of something like £179 million for the first quarter's return, compared with an over-all surplus, taking above and below the line, of £21 million for the equivalent period last year. If I were in Order, I could support these very damaging figures with many others indicating that above the line the surplus, instead of being as was expected, is only some £3 million, which allows for the general over-all figure of debit which I have just mentioned.
These figures are a very serious background against which to consider the Third Reading of the Finance Bill. When we realise that the House has just been presented with extra Supplementary Estimates amounting to £21 million, when we are told that more Supplementary Estimates are in the offing, and when we remember the Chancellor of the Exchequer's own words, when he said:
In particular, I have emphasised that only in special cases, such as, for example, major changes of policy, can any Supplementary Estimates in future be permitted."—[OFFICIAL REPORT, 6th April, 1949; Vol. 463, c. 2084.]
—we are astonished that once again the language of the Chancellor has proved to be false and that Supplementary

Estimates, apparently with no change in policy, have been introduced and that more are promised.
It is against this sombre background that we come to examine the details of what we have been through in the Bill itself. First of all, the concessions have been quite infinitesimal. We are grateful for what we have received. We are now permitted to take out a dog licence attached to a man or woman owner at a different time of year, and we have been duly grateful for this benefit. The right hon. Gentleman has not been able to meet those of us who took a more imaginative view of the attachment of a dog to the person of a man or woman. We had hoped that by some actuarial calculation, taking into account what the Leader of the Opposition has described as the magic of averages, the Treasury might bring to bear on the dog-owning problem the same genius that other right hon. and hon. Gentleman brought to bear on the construction of our general system of insurance in this country. But we must be grateful for that small mercy.
A slight difference has also been made on cinema seats. There are also two matters to which the right hon. Gentleman referred, research buildings and the question of insurance. We are grateful that the retrospective portion of Clause 22 has been removed. I believe that in the case of these life policies it was wrong that the taxation should have a retrospective effect. We are grateful to the Government for taking up our points on these various matters.
In general, however, the Government have dismissed the arguments of the Opposition as involving either issues and sums which are too small or issues and sums which are too large. Therefore, the right hon. Gentleman, with his long experience of Finance Bills, has been able to balance himself precariously in his place and reject nearly everything which has been put forward. He has been aided by the Economic Secretary and in close alliance with the daily journal attached to the Labour movement, in trying to persuade the public that legitimate arguments put forward on our side are designed to raise the cost of living and increase the burdens on the people. I need only mention that the public fully realise that it is the Chancellor himself who has been obliged by the facts of the situation


internally today to be the arch-imposer of cuts of a nature which no Chancellor for some time has been either obliged to or has dared to inflict.
It lies ill in the mouth of speakers on the other side of the House to accuse us of increasing the burdens on the public. If we go into detail in the Debate as to what has passed in the course of the proceedings on the Finance Bill, we note, for example, that while the Government have been trying to accuse us of imposing burdens on the people, they have themselves quite calmly put an extra £10 million in this Bill on the contributors to the occasional benefits, the unemployment, sickness and maternity benefits. The Chancellor of the Exchequer explained it in his Budget speech, and it has been put into force in the Bill.
Although every citizen will be glad to pay this extra sum of money by way of helping our national difficulties, we think it is a peculiar system of obtaining the money. What has happened? In future, relief is not to be allowed to contributors on that part of their contribution relating to these benefits. Why is that? A large number of people are going to pay an indirect tax of which they are not fully aware and about which it is the duty of the Opposition to warn them. The reason is that the Chancellor is unable to do what he ought to have done, and that is to tax the benefits themselves, because, as he said, they are occasional benefits and difficult matters on which to raise taxation.
I want to ask what would have been the sum originally expected from the taxation of the actual occasional benefits. I cannot believe that it would have amounted to £10 million. The fact is that by this devious method, the Government are imposing a burden of £10 million on a vast range of contributors, not only the working class but all classes who come into this range, and they are doing so at the same moment as they are accusing us of trying to impose burdens on the people.

Mr. J. Lewis: The right hon. Gentleman says that in his view the Government may be able to devise some means of collecting tax on occasional benefits. As the Government have not been able

to put forward any suggestions, perhaps the right hon. Gentleman can help them by saying in what way tax on these occasional benefits could be collected.

Mr. Butler: The question I wanted to put to the Government is what the difference in revenue was likely to have been between the idea as originally conceived and this imposition of £10 million on contributors in respect of the part of their contributions devoted to these benefits, which is a very serious burden on a large range of people just because the Government cannot collect the tax from the small number of people who obtain the benefits. That is unfair, and I do not think the Government ought to put a burden on so large a number of people just because they themselves are unable to devise a method for putting the tax on the benefits.
The other objection which the Government have made to the Opposition was that our suggestions were too large or too small. I thought I would try to put forward a small point which related to the remission from taxation of samples brought in for industrial research. That was an absolutely legitimate point to put forward, and it was put forward in all seriousness with a view to helping industrial research. What is the action of the Government? They inform us that they are unable to carry out this minor reform. Therefore, whether we have put forward large reforms or small reforms, we have been presented with a blank face by the Government.
What do the Government themselves do? In Clause 13, when it was a case of the Airways Corporation, they deliberately remitted the tax on materials coming in, for aircraft over a certain span, thereby giving an indirect subsidy to their nationalised industry. We regard this as a most unfair discrimination between legitimate private research as opposed to academic research, which already gets this benefit, and the case of a nationalised concern when it wants remission of taxation no doubt to help it pay its way. I believe that perhaps the most sinister and futile argument used by the Financial Secretary was that in the case of these samples coming in for industrial research the Government were obliged to hesitate because there was an element of the profit motive in private industry.
Is that the way to gain the confidence of industry at the present time when we want to win the battle of exports and encourage the production drive? Why should academic research be treated on a different moral basis from industrial research? Why should the Government remit taxation on materials coming in for Airways Corporation, which is nationalised, and not give this small benefit to industry when it is put forward in a sincere and serious manner?

Mr. Glenvil Hall: rose—

Mr. Butler: I see I have stung the right hon. Gentleman to rise, so perhaps he will deal with this point.

Mr. Glenvil Hall: The only query I would put to the right hon. Gentleman is why, if all this is true, did not the Conservative Government in 1936 do it?

Mr. Butler: When I brought the matter forward originally I mentioned—there is no secret on that point—that I was hoping, in view of the intense difficulties into which this Government have plunged the country, that the right hon. Gentleman would take some steps to alleviate some of the burdens imposed on industry at the present time.
This issue of business profits could detain me and divert the House for a long time, but I do not know whether it would be in Order on the Third Reading of the Bill, and we have had most of the figures before us. I simply want to say on this question that the Chancellor has partly met some of the anxieties of industry by increasing the depreciation allowance, or wear and tear allowance as it is called. He has also established an inquiry into possible alternative methods of helping industry with the problem of depreciation. It would indeed be churlish were we not again to express our gratitude for these steps. I would ask whoever is to reply to say at what date this inquiry will report and urge him to press those engaged in it to take the widest possible evidence—they will receive a diversity of suggestions on this difficult matter—and to endeavour to present a report as soon as possible which will help further to ease this problem.
It is to be remembered that this concession of the Chancellor is in no way a gift to industry because, in the end,

unless the rate of direct taxation comes down, there will be no gift to industry but simply an advance. Of course in some cases the advance will be substantial for the time being and will be of help, but in the end it will all come home to roost, subject, of course, to the rate of tax not falling. If the rate of tax were to fall, then there would be a form of concealed gift to industry. We on this side have not wanted to press for gifts to industry. What we have wanted to do in the various Amendments we have moved unsuccessfully is to attempt to bring before the Government the problem with which industry is faced, namely, the need for the replacement of plant.
The present cost of plant is just under three times what it was in 1938. I have calculated it, and I have been confirmed by the many communications on this subject which I have received. Unless we can get some further help, my fear is that a further burden will fall upon the Exchequer. Take the case of the cotton industry, which on the spinning side at any rate has had to receive a substantial Exchequer grant in order to modernise its machinery. It is undoubtedly the case that a similar possibility may have to be held in mind for the weaving industry, and if industry cannot meet its liability for replacement of plant out of its reserves and undistributed profits, then the Exchequer will have to come to the rescue.
We have, therefore, put forward in the interests of the workers, in the interests of the taxpayer and in the interests of industry a variety of proposals designed to assist industry in this matter We are sorry that the Government have been unable to accept any of our proposals and that the matter stands in the Bill as it was originally, namely, that there is simply an advance for depreciation. I must remind the Financial Secretary that in "The Budget and Your Pocket" this matter of industrial reserves was put very fairly from our point of view. This blue book says on page 15:
There are three main ways the nation saves money. Firms do it by not distributing all their profits to the shareholders; last year, leaving aside the cost of keeping up existing machinery and buildings, firms did over a third of the nation's saving.
It is because we believe that firms are doing such a large proportion of the


nation's saving, which the policy of the Chancellor is making disastrous in the general field of savings, that we ask for serious consideration, if it is possible at this stage, of the needs of industry in respect of depreciation of machinery. While I am on this point of savings, I have given the background of the first three months of the revenue returns which present the serious figure of an overall deficit. I must remind the House that for the first 14 weeks of the savings period there is a deficit, and not a credit, of some £10 million. These surely are different results from the objectives which the right hon. Gentleman stated at the opening of his speech.
The right hon. Gentleman made one short reference to Excise, and I want to draw the attention of the House for a minute or two to the portion of the Bill dealing with Customs and Excise. The figures for Customs show that there is a drop of some £12 million in the anticipated revenue, taking the quarter as representing a quarter of a full year. In the case of Excise, in which a total annual fall of £70 million was envisaged in the Budget, there has been already in one quarter a fall of £27 million which, multiplied, would mean a much greater fall in the Excisce than was anticipated by the Chancellor. These two are serious figures, and I cannot believe that even the hot weather is coming to the rescue of the Chancellor in the matter of the beer returns.
We should like further explanation from the Economic Secretary on the subject of the drop in the returns from Customs and Excise as part of the general picture against which we are considering this Bill. In this connection the right hon. Gentleman mentioned the pools and I would only say that we regard the position as it is left, as most unsatisfactory. We await the report of the Commission on Betting and should be grateful if we could have an indication from the Economic Secretary of when it is likely to present its report.
The last major matter to which the right hon. Gentleman referred was the Death Duties. We debated this at some length yesterday and I shall not go over all the ground again. The right hon. Gentleman observed that the family will not lose by the change. We regard that

as an inexact interpretation of the changes made by this Finance Bill. There is no doubt that what he indicated in his opening remarks, namely, that there was a lift in the duties as a whole, must of itself impose a considerable burden on the family. Following up this inaccurate remark of the right hon. Gentleman, the attitude of the Government towards this matter seems to us typical of their whole attitude in drawing up this Bill. They seem to want to be able to stand before the electorate and, with their full propaganda machinery behind them, say, "The poorer people are feeling no burden. We have put it on those who can afford to pay more."
With this in view, they have made a great deal in our Debates, through the Solicitor-General, of the fact that below £17,500 there is no great additional burden and, in fact, in some cases an improvement from the point of view of the family. What they have not made clear to the electorate is that they are perpetrating an injustice in comparison with the old system in regard to the family, at the levels which yield most of the Revenue. They are, therefore, taking the most short-sighted attitude which the Treasury could possibly adopt, and that is to be unjust at higher levels where they will get the money and to try to be popular and cheap in their appeal at the lower levels where they think they will get the votes of the electorate.
I do not believe that this is a wise policy to adopt, because one of the results of this Bill is that, as I said at the beginning, taxation remains at a stunning level, perhaps the highest of any country in the world. At the same time, in the case of Customs and Excise, Income Tax and Death Duty, we are getting to the stage where we are bound to have diminishing returns. Moreover, if Death Duty is maintained at this level and the other ranges of taxation continue, we shall in future have destroyed the reservoir from which the main Revenue returns are likely to come in to the Exchequer—at any rate, the main Revenue returns which can be sought without imposing a burden upon the electorate as a whole.
The result of the Bill, as was stated in an admirable speech yesterday by my hon. Friend the Member for Chippenham (Mr. Eccles), is, in fact, that the whole burden of our social reform and of the


welfare State is being set firmly upon the shoulders of the taxpayer. If we can persuade the taxpayer that the objective of the country is one entirely of self-help, there might be some moral basis for the structure of our financial system and policy. But the truth is that right hon. and hon. Gentlemen opposite still use language in this House and in the country designed to prove that benefits can come to people allegedly free or, at any rate, at the expense of the rich. That will no longer be possible in our financial system.
I believe that when we get into the position in which the people really understand who has to pay for their benefits, who has to pay to maintain their standard of living, and that they have to pay for themselves, the public will themselves demand economies, followed by relief in the crushing burden of taxation, whether direct or indirect. The public will realise one day that we cannot take on more than our means will enable us to carry out; and then, if the Government do not work with this tide of public opinion, we are determined to do so, and to save the structure of the social services and of our standard of living, which men of goodwill, of all types and creeds, have already built up.

4.32 p.m.

Mr. Paget: The right hon. Gentleman the Member for Saffron Walden (Mr. R. A. Butler) concluded his speech with some rather ambiguous words. He said that the people, realising that as taxpayers they have to support the burden of the welfare State—of course, that is true—would rebel against it and demand economies. What economies? Will the right hon. Gentleman tell us that? Does he at this stage say that the benefits of the welfare State should or should not be cut? It is important that hon. Members opposite should make their position on this clear.
We have all been interested in the right hon. Gentleman's speech. We have all been a little intrigued at his selection on this occasion, for he is probably one of the few remaining members of the Conservative Party who still believe in the welfare State, who still believe in full employment. Hon. Members opposite have been ceasing even to pay lip service to full employment in their publications in recent months. They have been going for the

1931 idea; they have been demanding the axe; they have been demanding cuts of food subsidies and of social services, and they have been wishing to get back to a different level of living by the old traditional method of deflation. But that is not the view of the right hon. Gentleman, yet it is he who has spoken for the Conservative Party today.
I wish to deal not with these general things but to confine myself to a comparatively small delusion which is always coming into the arguments put forward from the other side of the House; that is, that a high taxation system puts up the cost of manufacture, and, therefore, puts up the cost of exports. In fact, given a particular standard of living, high taxation has precisely the opposite effect; it lowers the cost of production and the cost of our exports. If we have a given standard of living, then food subsidies mean that our wages are less. It means that because the taxpayers as a whole are paying for part of the workers' food, the manufacturer is getting his labour cheaper.
In exactly the same way National Insurance relieves the manufacturer of a charge he would otherwise have to bear. Efficient businesses are in the habit of running their own welfare departments. They know that they do not get the best results unless there is welfare in their workers' homes. That is a burden which is taken from the employer, which the employer would otherwise have to pay.

Mr. Beverley Baxter: May I ask the hon. and learned Member a question on the very interesting line of thought he is now developing? Supposing the party opposite, convinced that he is right, developed more and more social services to the extent of an additional cost of, say, £1,000 million, does he really say that in that case the cost of production would decline correspondingly? That is the argument he is trying to put forward. I think it is absolute moonshine madness.

Mr. Paget: That is a complete non sequitur, as I am sure the hon. Member will realise from my argument. The argument I am putting is this: that if we have a given standard of living—a given standard of living means, roughly speaking, that people have so much to spend or have so much spent on their behalf—either it has to be paid for by the


employer and comes in as a cost of manufacture, or it is paid for by the community as a whole, including the employer, and does not come in as a cost of manufacture; it does not enter into the manufacturer's costings. Whereas, if we had low taxation and the same standard of living, the whole cost of living would have to be borne by wages and we would, of course, have wages demands and wages would have to go up; and that would come into the costings of the manufacturer.
Let me deal with another example, workmen's compensation, which used to be a direct charge on the employer, who had to maintain the insurance. Now, that has been taken off the shoulders of the manufacturer, which means a lower cost of production. Then there is the Health Service. An employer gets better returns if his workmen are healthy I, as a farmer, certainly should not say that my costs or prices were being increased if, for instance, somebody volunteered to pay my veterinary bills. All these items are in fact a concealed subsidy to the manufacturer and exporter. They all mean that the exporters prices are lower than they would be if these social services were not in existence.

Mr. Molson: Does it follow from this line of argument that the contributions paid for National Insurance and industrial injuries by the employer in respect of each of the men employed by him do not also add to the cost of production?

Mr. Paget: Oh, certainly they do. But those contributions paid by the employer which come into his costings are only a part of the cost. If the standard of living is to be maintained the expenditure will still be there but it will be borne by the manufacturer who in the form of wages will have to provide the whole of the cost instead of only a part.
My sole argument, and I think it is really incontrovertible, is that a standard of living, a social service and high taxation system mean that manufacturing costs are a lot lower than they would otherwise be. There are exceptions, but taxes come in as to the overwhelming majority after the point of

costing. The costings do not include taxation to any considerable extent. Only the replacement of equipment and machinery is normally paid for after taxation, but this Budget and Finance Bill give a great deal of relief in that direction. The proof of the pudding is that our prices in the world overall are competitive today—[HON. MEMBERS: "What?"]—they are competitive.

Sir Harold Webbe: The hon. and learned Member should try selling at those prices.

Mr. Paget: I shall come to that point. The reasons for difficulties in selling are quite other than those of price. The reasons for difficulties in selling are primarily because people will not allow our goods in. It is not the prices but the small amount of imports which, owing to various restrictions, people will accept. When we come to the present position in regard to the dollar gap, it is not manufactured exports that are falling except to a very small degree. In far greater degree it is in raw materials that exports have fallen. Tin in Malaya and cocoa—

Mr. Deputy-Speaker (Major Milner): The hon. and learned Gentleman ought not to indulge in an economic Debate. I think he is in Order in trying to justify taxation set out in the Finance Bill, but he should not go further than that.

Mr. Paget: Perhaps I was going a little wide. I was trying to justify the high taxation system and I was saying that it was irrelevant to the raw materials which the Americans are not buying today; and, as far as manufactured goods are concerned, that is not where the marked falling off has occurred. In regard to Canada there has been a considerable increase in our sales of manufactured goods. If we take overall averages there is nothing wrong with the price.
Why we cannot get our goods in, is not because our prices are too high, but because there are no free markets in the world today in which our goods can compete. It is a complete illusion to imagine that there is a free economy in America. There is a high tariff subsidy system and the Americans have no intention of allowing our goods in, save, on terms that are not competitive. The moment any of our goods became competitive with American production they would be promptly excluded by their


tariff system. That is what their tariff system is for. It is only where our production is not competitive with that of the Americans that they will allow it into their market.
Unfortunately, while our taxation system allows our exports to be cheap and competitive, the American system subsidises through Government purchase and maintains at an uneconomic level the prices of the raw materials we must have. This inflates her export prices. The farm subsidies—the mineral subsidies—the whole American subsidy system is the source of this problem. The U.S. Government pass their internal subsidies on to us. Cutting our prices is not going to solve our difficulties. We have either to stop importing from America, or the Americans have so to arrange prices of their surpluses—and, remember, export is less than 5 per cent. of total American production—that they are exchanging for the non-competitive goods which we alone can send them and which alone they will accept. This world problem has to be solved primarily by an adjustment of American prices, not British prices.

4.48 p.m.

Mr. Molson: I should be imposing on your patience, Mr. Deputy-Speaker, if I sought to deal with American prices in a Bill which primarily concerns this country, but, in reply to the opening observations of the hon. and learned Member for Northampton (Mr. Paget) I would say it is not a very adequate basis for an argument to take taxation as a whole. There are obviously some taxes which enter into the cost of production and others which do not. I also think it a fallacy to talk about there being a given standard of living in this country. As I said in the Debate on the Finance Bill last year, the standard of living which is being maintained in this country at present is one which is completely unreal and which can only be maintained, unless there is a great increase in production, as long as we are in receipt of eleemosynary help from America.
I wish to confine myself to what I believe to be the main underlying fallacy of this Finance Bill. It is intended to give effect to the Government's economic policy as set out in the Economic Survey, 1949, and is intended to provide the

necessary finance in addition to what is provided from the savings of the country. When introducing the Bill, the Chancellor of the Exchequer indicated that he was expecting that the savings of the country would not be adversely affected by this finance Measure. I wish to repeat to this Chancellor of the Exchequer what I said in 1946 to his predecessor, that the programme of capital expenditure on the coal, steel, electricity and gas industries, on housing and education, all involve capital expenditure for which there were not likely to be savings, and that if the programme went beyond the savings of the country the result would be inflation.
How right I was. In the proposals this year the present Chancellor anticipates that it will be possible for there to be approximately the same gross national investment as there was last year—approximately £2,300 million. That can come, in the first place, from company savings; secondly, from personal savings, and thirdly, from governmental savings of which one of the most important items is the Budget surplus. With regard to company savings, the Financial Secretary today spoke with complacency about the assistance which he claims is provided in the Bill to industry for depreciation. But he can hardly deny what I think has come to be generally accepted that at present, owing to the tremendous difference in the cost of replacement of capital equipment since before the war, the depreciation allowance is quite inadequate to enable industry to replace its equipment when it is worn out. All that is provided in the Bill is not that in the long run there shall be actual depreciation allowances which will be enough to replace pre-war equipment with modern equipment at up-to-date prices, but merely that a larger allowance is given in the initial years.

Mr. Glenvil Hall: Mr. Glenvil Hall indicated dissent.

Mr. Molson: I see the Financial Secretary is shaking his head. If I have fallen into error, no doubt he will correct me.

Mr. Glenvil Hall: I may be wrong, but I gathered from what the hon. Gentleman was saying that he seems to have assumed that the whole of the capital re-equipment is to come out of the initial allowance. That is not so.

Mr. Molson: That is the point which I was endeavouring to make—that the


total allowance for depreciation is not altered by the present Finance Bill, but that all that happens is that the depreciation allowance in the early years is greater, and that consequently the depreciation allowance under the present law in the later years will be less. The effect of this is, as was said in "The Economist":
This system means the overstatement of profits, the understatement of production costs and a consequent erosion of the capital of business.
I believe that to be entirely true.
The Chancellor of the Exchequer has apparently been impressed by the representations made to him on this subject, and I welcome the fact that he has set up a committee to go into this matter, but that indicates that for the future what companies put to reserve in undistributed profits will not only be needed for modernisation and extensions, but that some of it will be required for the mere replacement of existing equipment as it is worn out. It is, therefore, disastrous that the rate of tax upon undistributed profits should be 9s. Income Tax plus 2s. Profits Tax. The Chancellor of the Exchequer made an appeal to industry to plough back as much as possible of their profits in order to be able to modernise and extend, and it is poor encouragement to them that what they plough back into the industry should be taxed at the rate of 11s. in the £.
I now come to what can be done by personal savings. This, at one time, was the main source of savings. I find on page 23 of the document entitled "The National Income and Expenditure of the United Kingdom" that whereas the net savings of persons in 1947 was £165 million, by 1948 it had dropped to £6 million. Indeed, that is not surprising as a result of the general financial policy which the Chancellor is following, and on which he prides himself and, indeed, which he elaborated again only last night. The rich who used to do most of the saving now cannot save, and under the new Death Duties they will be less able to do so than before. Unfortunately, those who, in the past, might have been described as the poor are in fact not doing so. I do not know why Lord Mackintosh complained about a letter which I wrote to "The Times" upon this subject, because last year the net total

of small savings—that is, what was paid in less what was drawn out—amounted only to £30⅓ million. According to the return I looked up this morning—I notice a slight discrepancy between the figures of my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) and my figures—from 1st April, 1949, to 25th June, 1949, there is actually a deficit of £5,500,000 in the case of small savings. Gross personal savings in 1948 were £221 million—just the same figure as in 1938—but the difference is that the percentage of the national income has gone down from 4.9 per cent. to 2.7 per cent.

Mr. Jenkins: I am sure the hon. Gentleman does not wish to present an unfair picture. I think that in referring to the percentage of personal savings compared with the national income, he ought, when dealing with company savings, to say that they have gone up by just enough to balance the decline in personal savings.

Mr. Molson: It is, of course, true that they have gone up. Since the hon. Gentleman raises that point, I will say how much I regret the appeal to prejudice which the Chancellor of the Exchequer made in his speech on the Bill, when he complained about the profits put to reserve by companies being £1,215 million. In answer to the Chancellor, I would say that that figure is completely meaningless, since he did not state and did not know upon what total capital various profits had been earned; nor did he even know upon what turnover of goods it was earned.
As to what has just been said by the hon. Member for Central Southwark (Mr. Jenkins), I would point out that in this semi-official document to which I have referred it said that the increase in company profits between 1947 and 1948 went either into reserves or into provision for taxation. The point which I am seeking to make is that this Bill imposes such burdens, first of all, upon companies and, secondly upon persons, so that at the end of this financial year the £2,300 million of savings will not have been made by the nation to finance the Government's investment programme without inflation. It might have been expected that wage earners would have been able to have increased their savings, because of the disposable income from property they


now take 50 per cent. as compared with 40 per cent. before the war.
My last point relates to the governmental savings whose aggregate are shown in the table in this document as £716 million. But that, be it remembered, is the total saving, constituted by the Budget surplus, all surpluses of local authorities, all depreciation allowances and all transfers, such as war damage payments, compensation to doctors, and so on. This £716 million is the gross saving made in respect of that 40 per cent. of the total income of the country which is being taken by the Government. Therefore, I say that the effect of this very high level of expenditure, which the hon. and learned Member for Northampton thinks is not harmful to industry, is at present to take so large a proportion of the national income of the country that there will be very little left as savings.
I am not one of those who consider that the greater part of Death Duties is a direct drain on capital. I have in the past engaged in newspaper controversy to show that is not the case where ordinary shares, for example, are sold by the executors of a rich man and bought by someone else. That does not reduce the capital of that particular company. I pointed that out at a time when the savings of the country appeared to be reasonably adequate for the purposes for which they were required. The effect of these Death Duties at that time was to draw upon the savings of the country as a whole, because when some shares were sold there had to be a purchaser, and they were purchased out of the gross savings of the country.
Today, when the Government are rightly putting forward a great programme of industrial investment for this country, the effect of the Death Duties, and the increase in those duties, upon which both the Chancellor of the Exchequer and the Economic Secretary preen themselves, will be to make further drains upon the already inadequate savings of the country as a whole. I believe that the financial policy of this Bill will fail because the savings of the country will not be adequate to carry out the Government's economic programme.

5.4 p.m.

Mr. Douglas Houghton: I have been very interested in what has

been said by the hon. Member for The High Peak (Mr. Molson) about the disappointing results of personal savings. It may be that being a little closer perhaps to working-class folk, I know why there has been this disappointing result in the National Savings Campaign in recent months. I do not think it is because working folk have not the money. If that were so, how should we explain that nine million homes in Britain today appear to have money to invest—such is the term—in football pools in varying amounts from 2s. upwards per week? I constantly remind my friends that they can secure for themselves either increased savings or increased incomes any time they like to discontinue investing their money in football pools. I think that the mass of working folk today do not feel the incentive to save as they used to years ago.
What was the driving force behind this almost religious doctrine of thrift? It was fear of the workhouse and of the relieving officer; it was saving for a rainy day. One of my earliest recollections is having this necessity for thrift dinned into me; I was told that if I did not save up for my old age, I should finish up in the workhouse. Many people were all provided with money boxes almost before they knew what to put into them. Today, working-class folk are contributing to a comprehensive security scheme which is providing for sickness, industrial injuries, for widows and orphans, and for old age. It is only natural that the urge for personal thrift, which was such a feature of the days of social insecurity, has been adjusted to the new conditions of National Health Insurance and the Industrial Injuries Scheme.
I should like to refer to the description the Financial Secretary has given to the Budget whose proposals are embodied in this Bill—that of a "standstill" Budget. I would suggest a somewhat different and more appropriate term—a "standfast" Budget. These proposals represent the determination of the British people to stand firm on the course which they have set and which, they believe, will eventually lead to a solution of our difficulties. I regret, on several grounds, that the Bill does not contain more proposals for shifting the emphasis from indirect to direct taxation. Direct taxation is left, broadly, as it was, and it is perhaps a smaller pro-


portion of the national revenue this year than ever before in our history.
On the other hand, there are one or two proposals in the Bill which everyone, I think, will generally welcome. Many people will be glad to see an end, at long last, to the inequitable and obsolete Land Tax. I am sure that the Chancellor of the Exchequer must have been strongly tempted to abolish the thing out of hand, without any fuss or palaver. But our passion for equity has led him to include in the Finance Bill some complicated and no doubt fair provisions for the extinction of Land Tax by compulsory redemptions.
I was a little worried, and I still am, about the manipulations, if I may use that term, of my right hon. and learned Friend in connection with the taxation of National Insurance benefits and the corresponding adjustment of Income Tax on contributions. He no doubt thought that when he could not collect the money on occasional benefits, it was better to drop the idea altogether, and logic probably drove him to make a corresponding adjustment in the Income Tax set-off on that part of the National Health contributions which relate to the benefits he is proposing to relieve from tax.
I have a better idea still, and I make a present of it to my right hon. and learned Friend, and that is to relieve all National Health Insurance benefits from Income Tax and, correspondingly, to make no Income Tax set-off for contributions. I think that that would be the best way of dealing with a difficult situation, for, after all, sickness benefit is not income within the acknowledged definition of income under the Income Tax Acts. It is not income from trade, vocation or employment; still less is unemployment benefit or maternity benefit. However, that is something which my right hon. and learned Friend may wish to consider on another occasion. It would certainly simplify considerably the whole administration of Income Tax.
Another matter in the Bill which troubled all of us in the House was the proposed increase in the tax on football pools. We had a very long Debate on that, but I think, in perspective, we see that the increased tax on football pools is not—as has been alleged by many who

have written to us—a tax on the working man's pastime. His pastime is not costing him any more. It costs him no more to go in for football pools than before. His satisfaction, his excitement, his expectation, will not be diminished by the thought that if he wins a big prize it may be a thousand or two less than it would otherwise have been. The truth of the matter is that the tax on football pools is a tax on prizes. It is not even a tax on the promoters, because they will pass it on to the prize-winners. It is a tax on windfalls which has long been acknowledged by Chancellors of the Exchequer as a very desirable tax, and one which has no inflationary or deflationary consequences.
Listening to the speech of the right hon. Member for Saffron Walden (Mr. R. A. Butler) I thought that before he finished I was almost bound to hear what has now become the Tory slogan—"the crushing burden of taxation." If I may say so without undue offence, the Opposition should examine this repeated allegation and assertion about the crushing burden of taxation and the transfer of income to the State. In the words of the hon. Member for The High Peak 40 per cent. of the national income is being taken by the State. Those words need closer examination because they cannot be accepted on their face value.
Let us see whom this burden of taxation is crushing. A very good index to that is our scale of direct taxation. As hon. Members know, but may wish to be reminded, a single person earning £2 10s. a week pays no Income Tax at all. A married person getting £4 10s. a week pays no Income Tax at all. A married couple with one child can earn up to £6 a week before paying tax; with two children they can earn up to £7 a week, and with three children up to £8 a week before they are touched by the crushing burden of Income Tax. Even above that, with the operation of the band of reduced rate of tax at 3s., and with the reduced rate of tax at the 6s. rate, the effective rate of Income Tax on the whole of incomes is remarkably small. A single person earning £4 a week pays Income Tax at the effective rate of 9d. in the £. A married man with no children getting £6 a week pays Income Tax at the effective rate of 8½d. in the £ and a married man with three children


getting £10 a week pays tax at the effective rate of 3d. in the £. Even a married man with three children, getting £12 a week, only pays tax at an effective rate of 11½d. in the £; £29 in tax altogether.
In a recent issue of the "Economist" there was a letter from an employer, who wrote:
I have from time to time been exceedingly irritated by the excessive grumbling levelled against Income Tax. Owing to persistent publicity, I think that the average employee genuinely believes that he pays Income Tax at the rate of 9s. in the £ on his earnings. I frequently hear of cases of reluctance to work overtime because of, 'Income Tax taking nearly half the extra money.'
He goes on, in that letter, to analyse the actual Pay-As-You-Earn deductions for a full financial year on his 168 workers. If the House will bear with me I will quote the experience of a full financial year of deductions on Pay-As-You-Earn from his engineering workers, to whom he said he pays somewhat more than the basic rate of wages: 18 per cent. paid no tax at all; 2 per cent. paid tax up to £1 a year, or 4.3/5d. a week; 4.1/6 per cent. paid tax of over £1 but under £2 a year, or 9¼d. a week; 2 per cent. paid between £2 and £3 a year; 2 per cent. paid between £3 and £4 a year and 1.1/5 per cent. paid over £4 but under £5, which, as he says, brings this result: that 30 per cent. of his workers were paying less than 2s. a week in tax—less than the pay for one hour's work.
All taxation is a diversion of private income to public expenditure. We hear much talk about taxation and the crushing burden of taxation and the 40 per cent. of all incomes which is taken by the State—as if this were a dead loss both to the people themselves and to the community at large; as if all State expenditure were necessarily a bad thing. We know, in fact, that much taxation is a redistribution of purchasing power.

Mr. Molson: I do not deny anything of that sort, but I say that if the State decides to take the income and redistribute it as it chooses, that is a discouragement to incentive for the person who earns it. If we are to take it from the working man and give it away to other people, because we think they deserve it, it means that that is a disincentive to the worker.

Mr. Houghton: I will show that much of the money taken in taxation, and taken

away from the working man, is, in fact, given back to the working man with something added to it. I will give examples of taxation which is redistribution of purchasing power, and the first I will mention is interest on internal debt. That takes £485 million a year. Surely that is one of the chief features of our taxation system which has the effect of redistributing income. Then we have cash payments, like old age pensions and insurance benefits and family allowances; but all these, as a charge on taxation, are costing us less than the interest on internal debt.
Other features of our taxation system surely mean that taxes are devoted to purposes which increase efficiency, prevent waste of man-power and increase the general well-being of the country. This is taxation devoted to purposes which are designed to brace the nation for the tasks which lie ahead, and render it fit and efficient for the tasks which rest upon us. Examples of that come to mind at once; in housing, education and in the Health Service. This taxation, also, is for internal and external security.
Here we come to one of the biggest single items in the whole of our financial system, that of defence. That is more than a charge upon our finances; it is a drain upon our man-power, our labour and materials. A reflection which I think we shall all do well to bear in mind is whether Britain can afford to carry this enormous expenditure, much of it waste from the point of view of economic recovery, much of it a drain upon national resources. We shall have to reflect on whether we can afford it and whether the security which we are buying with this money is, after all, real security. Then we also have taxation to keep down the cost of living, with food subsidies costing, in taxation, £465 million a year.
There we have 70 per cent. of the nation's total expenditure analysed in that way, partly in redistribution of purchasing power, partly in purposes which are designed to strengthen and improve the efficiency of the country, to secure internal and external defence and to keep the cost of essentials steady and so stem the pressure for wage increases. We all know that we cannot reduce taxation without reducing expenditure, and we are constantly asking, and I think we are


entitled to an answer, where the cuts are to come and what will be the effect of making them.
I mention here one example of the sort of confusion of thought into which we can get on the question of reductions of taxation—the reduction of taxation by cutting out food subsidies. If we do we reduce taxation and actually increase the cost of living. Are we to reduce taxation by cutting out the Health Service? If so, we reduce taxation but increase the cost of sickness. Are we to reduce taxation by restoring secondary school fees and by withdrawing university grants? If so, we reduce taxation but we increase the cost of higher education. Are we to reduce taxation by cuts in the social services? If so, we reduce taxation at the expense of the aged, the sick, the crippled, the disabled, the blind, the widowed, and the unemployed. If it is in that direction that the eyes of right hon. and hon. Gentlemen opposite are turned in our immediate difficulties all I will say is that the Conservative Party are running true to type, and that their eyes are cast back right to 1931, when all those things were done as the basis of financial recovery.
I challenge hon. Gentlemen opposite by asking the question: are we to reduce taxation by cuts in defence? Another point is, if we are to reduce taxation, what shall we reduce? What would be the consequences on the level of prices and costs if we were to reduce taxation in certain directions? Take, for example, the tax on tobacco. If one of the prime purposes of the high tax on tobacco is—

Mr. Deputy-Speaker (Major Milner): The hon. Member is getting away from the contents of the Bill. He seems to be expounding economics and other matters which have no direct relation to taxation, which is, in the main, the subject matter of the Finance Bill.

Mr. R. A. Butler: The hon. Member has made various observations. I had understood that when the Financial Secretary had moved the Third Reading we were obliged to concentrate upon the contents of the Bill. I accordingly devoted my speech to a large extent to the somewhat arid surface of the contents of the Bill, only following the figures raised by

the right hon. Gentleman. Are we at liberty to answer from this side of the House the allegations made by the hon. Member?

Mr. Deputy-Speaker: If I am in the Chair, I shall certainly give the same liberty of action which has been given to the hon. Member for Sowerby (Mr. Houghton). The hon. Gentleman is dealing with the question of taxation, but he also appears to be going into other matters which have no direct relation to it.

Mr. Houghton: I beg your pardon, Sir. I can only plead that, being new to the House, I did, as part of my apprenticeship read through the whole of the speeches made on the Third Reading of the Finance Bill of last year.

Mr. Deputy-Speaker: The hon. Member appeared to me to be going into questions of expenditure, which is not, of course, appropriate at this stage, and also to be referring to alternative methods of taxation, which, again, do not arise.

Mr. Houghton: I thought that questions of taxation, at all events, were very close indeed to the Finance Bill, but if I transgressed the Rules of Order, I apologise, and I hope that you Mr. Deputy-Speaker, will guide me if I stray again in the concluding remarks which I wish to make.
This seems to me to be so vitally important in connection with general statements which were certainly made, if I may say so with respect, by the right hon. Gentleman the Member for Saffron Walden when the "crushing burden of taxation" was referred to, that I thought I might be permitted to analyse the truth of that assertion, at all events in regard to some numerous sections of the community. If I may proceed—

Mr. Deputy-Speaker: That may be so in so far as relevant items are included in the Finance Bill, but not if they are outside the Bill.

Mr. Glenvil Hall: If I might intervene, Mr. Deputy-Speaker, I would say that have listened carefully to what my hon. Friend has said, and that most of what he has referred to seems to be within the four corners of the Bill.

Mr. Deputy-Speaker: I am obliged to the right hon. Gentleman.

Mr. Houghton: I was trying to examine some of the consequences of reducing taxation. I question very much whether reductions in taxation in certain directions would have the desirable consequences which hon. and right hon. Gentlemen opposite seem to suggest. For instance, are we sure that if we abolished some of our taxes the consequences would not be harmful? Reduced taxation is inflationary in that tax reductions are equivalent to wage and salary increases; they are equivalent to increases in personal incomes, and unless those increases in personal incomes are matched by corresponding increases in goods and services, I submit to the House that the result is inflation.
When we are speaking of incentives, as Members of the Opposition are constantly doing, I would remind the House that in last year's Finance Act concessions were made to 8,750,000 direct taxpayers, and that tax reductions ranging between £2 10s. and £86 5s. a year were made on all earned incomes up to £2,000 a year. I submit that my right hon. and learned Friend is absolutely right when he sets his face against releasing more loose money by reduced taxation at a time when the consequences are almost certain to be inflationary.

Mr. Beverley Baxter: At one moment the hon. Member seemed to be commending the Chancellor for having made some tax concessions last year, and then he congratulated him on not having done so this year. Of which year does the hon. Member approve?

Mr. Houghton: I am approving of this year in the light of the facts. I should have approved of last year's Finance Act had I been here to do so, but, in retrospect, I suggest that the tax reductions made last year have increased the cost of living because they have not been matched by corresponding increases in goods and services. To that extent the incentive which my right hon. and learned Friend hoped to give by the Finance Act last year has not proved to be as good as he thought it would be.
I am coming to the end of this analysis of the Conservative slogan of "the crushing burden of taxation," and such phrases as are used about the State taking 40 per cent. of all incomes. The very proposal made earlier for a reduc-

tion in the standard rate of tax, which happily is not contained in the Bill now before us—

Mr. Sidney Shephard: I should like to make it perfectly clear that the statement made by hon. Members on this side of the House is that 40 per cent. is the proportion of the national income and not the proportion of all incomes.

Mr. Houghton: For all I know, it might be a higher percentage on personal income in some cases and a very much lower percentage in many others.
I wish to mention the question of incentives. We heard in an earlier discussion on this Bill, I think from the hon. Member for Hornsey (Mr. Gammans), about workers who will not work overtime because of the higher rate of tax. I submit that it is evident that workers who will not do extra time for extra money are not in need of extra money. If by reducing taxation we give them more money for no more work, what will be the consequence on the level of prices then? What is the significance of the nature of some of the expenditure on which many folks are embarking at present and which, surely, can have no bearing on incentives and does not confirm the suggestion that people are looking for more money income in order to enjoy a reasonable standard of life? Is there any sign in all that we see, of the crushing burden of taxation in industry? Is there any sign in their profits? Is there any sign in their dividends or in their bonus share issues which are becoming more numerous now that my right hon. and learned Friend has proposed to abolish the 10 per cent. tax on bonus issues?
I agree entirely that some revision of the basis of taxation on profits is probably overdue. The committee which the Chancellor has appointed to inquire into that subject will, no doubt, present a useful and interesting report in due course. The burden on industry is not taxation. The burden on industry is slackness, waste and outmoded habits of thought on the part of both management and men, together with the excessive cost of raw materials which come from overseas and for which we are being held to ransom by those who have them to sell.
In this Bill I think that, on the whole, we have sound principles of finance in the


circumstances in which we find ourselves. What is now needed is the economic education and enlightenment of the people. I think that the country badly needs economic education. The only question is whether they will learn their economics from hon. Gentlemen opposite or from us. Some people say that there is no time for the people to learn their economics from the architects and founders of the welfare State. It is alleged by hon. Gentlemen opposite at times, that the Tory method of reduced taxation, in which the better-off will benefit and possibly the country will have the burden of 1,500,000 unemployed, is really the economic lesson to teach the British people. If that is the sort of lesson which is to flow from the political philosophy and the economic doctrines of hon. Gentlemen opposite, all I can say is that a return to that is terrifying, immoral and unthinkable.

5.35 p.m.

Mr. Godfrey Nicholson: I was very much interested in the speech of the hon. Member for Sowerby (Mr. Houghton) not only because he is a comparatively rare visitor to the House, but for two other reasons. First, he attempted to deal with the Budget in a way in which I think it ought to be dealt with—not by making a piecemeal, meticulous examination of its propositions but by treating it as one in a series, marking a stage in our progression either upwards or downwards. Secondly, I thought I saw in his speech a preview of the sort of election speeches which the Labour Party will make when the General Election comes along.
I should like to warn him and his colleagues that they will undergo severe criticism if they do not cleanse themselves of at least two of the major errors of which the hon. Gentleman was guilty. He must certainly clear his mind of one idea. He seems to think that nobody, except those who pay direct taxes, bears the burden of taxation. He must recognise that in so far as taxation is a charge on production—and I should say that it is at least 95 per cent. that now—it is paid by every citizen. I must say that the hon. Gentleman is not alone in that illusion. He must also get out of the way of saying that high taxation is all right provided that the object on which the money is spent is desirable. The party opposite

will have to rid themselves of that idea before they can make intelligent contributions to our economic thought.
I wish to follow the hon. Gentleman's example, because I do not think that the House should say goodbye to this Bill without yet another reminder of its implications for the future. I suggest that the implications are far graver than are generally realised. The gravity of the position lies in something about which we have heard a good deal today and a certain amount during the Budget Debates. I refer to this familiar figure of the 40 per cent. of the national income which is taken from production by the Government and spent on various objects. That is the highest figure in the recorded history of any country in the world. The nearest corresponding figure is that of the United States, which is 25 per cent. After that, Sweden and South Africa come next at 19 per cent.
I do not think that we have yet faced the fact that this unprecedented level of taxation is exerting continuous inflationary pressure upon our economy, and that it gravely threatens the cost of living. Not only does it gravely threaten the cost of living, but it has already affected it, and inevitably it is gravely affecting our costs of production. I do not offer that for the acceptance of the House merely because it is my conclusion. It is the conclusion held by the majority of economists in the country. When economists do agree to any large extent, I think they should be listened to. They have at last agreed on something. There is something far more serious even than that.
This inflationary pressure, far from becoming less or remaining stationary, is certain to increase unless we call a halt to our rake's progress. The danger of looking at the Budget in isolation is that people tend to ignore trends. The trend here is certainly that our commitments are inevitably becoming larger year by year. Another trend is that the yields from existing rates of taxation are becoming less and less. We have already heard from my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) that the yields from the present rates of taxation in this Budget are below the estimates. I venture to predict that even this Budget will not balance at the end of the financial year. Unless we recast our fiscal


ideas radically, our progress, from being a rake's progress will become Gadarene and we shall run down to the depths of disaster.
I do not propose to keep the House for long, but I want to put four ideas before hon. Members. Firstly, I ask the House to recognise that inflationary pressure exerted on the cost of living is the main cause of wage demands. I have very great sympathy with wage demands, and I cannot see how hon. Gentlemen opposite can support the Government in resisting demands for wage increases from classes of the community who are by no means overpaid, when they support a Bill like this which increases the taxation on certain necessities or quasi-necessities, like tobacco, which affect the high level of direct taxation.

Mr. Harrison: May I interrupt the hon. Gentleman? In what part of the Bill is an increase of the duty on tobacco indicated?

Mr. Nicholson: I should have said maintain the high level of taxation on tobacco. I am grateful to the hon. Gentleman for correcting me. I should have thought that it was perfectly obvious that any form of indirect taxation of quasi-necessities must result in increased wage demands. I should have thought it was perfectly obvious that anything which tends to increase the cost of manufacture of articles and thereby raises the cost of living must mean increased wage demands. I say that there is something like hypocrisy, though perhaps unconscious hypocrisy—

Mr. Mitchison: May I ask the hon. Gentleman a question? Would not the removal or the diminution of the food subsidies have exactly that object?

Mr. Nicholson: I have not yet come to the food subsidies.

Mr. Deputy-Speaker (Mr. Bowles): Food subsidies are not in the Bill, nor is the tobacco duty.

Mr. Nicholson: I was going to say that I see something hypocritical, though perhaps quite unintentionally so, in the policy of wage restriction without any attempt to combat the steady rise in the cost of living which has already taken place and which will become more rapid unless steps are taken to arrest it.

Mr. Baxter: On a point of Order. When you were not in the Chair, Mr. Deputy-Speaker, the Debate roamed very far and extended from the prices of American goods to I do not know what. When he was asked on a point of Order, your predecessor in the Chair implied that we could go very wide in this Debate, provided that we did not labour any one point too long if it was not directly in the Bill. Certainly, a discussion on the maintenance of the taxation on tobacco would have been allowed 20 minutes ago, and we should like your instructions on the point, because practically nobody has mentioned the Finance Bill.

Mr. Deputy-Speaker: That seems a pity, and I cannot comment on that at all. In a general way, the hon. Gentleman can refer to the cost of living, which he says is being affected by taxation in this Bill, but as tobacco is not mentioned I should not have thought that he would be right in referring to it.

Mr. Nicholson: I quite agree, Mr. Deputy-Speaker. The purport of my speech is to warn the House and the country that the maintenance of the present level of taxation which is enshrined in this Bill will be disastrous, and I will endeavour to keep to that general line.
I say that the level of taxation being maintained as it is now means that we are at the very best definitely committed, even if taxation goes no higher than the present rates, to reducing the real value of money incomes. I think that any increase in the level of taxation, so long as the present trends of Government expenditure are maintained, will inevitably lead to a reduction in the real income of every individual in the country. There is only one alternative, and that is a measure of inflation, and that in itself implies that it is to be nothing more than a temporary palliative unless Government expenditure and taxation should come down pro rata. The fact is that the Socialist terrestrial paradise is not only not here yet, but the prospects of it are actually receding.
The second point is the one which I have already touched upon in connection with the speech of the hon. Member for Sowerby. We must rid ourselves of the fallacy that the evils of high taxation do not matter provided that the product of


that taxation is spent on wise or desirable objects. Economic laws do not work on humanitarian lines. The fact that we are spending the products of our high taxation on objects that are considered desirable does not at all affect the evil consequences of high taxation. If I were to borrow money from the bank to save the life of my wife, to educate my children or to do something else equally desirable, it has no effect on the fact that I have an overdraft at the bank. The political philosophy of hon. Members opposite seems to be that economic laws work in such a way that they can spend the products of an inflationary budget on worthy objects without harmful results. It is as if one said that if one puts ones money on a horse one will be in debt to the bank but not if one saves the life of one's wife with the money that has been borrowed. I beg of them not to attack expenditure from the angle of whether it is desirable or not, but from the angle of whether we have the money to spend, and whether, in fact, we are not spending money which is really not there.
The welfare State is not just a redistribution of wealth. By its very definition, it must mean incurring new items of expenditure, and in so far as these are incurred, they are a charge upon the production of the country. After all, even if it was just a redistribution of wealth, there would be certain losses due to the fact that money passes through the hands of the Government. Unless they incur expenditure for the good of the people which the people would in any case probably incur for themselves, it must be a new charge on the productive capacity of this country. That is the policy which is at the root of the welfare State, and that is the policy which will bring it down in ruins. We cannot incur new expenditure and pretend that the cost is not paid for by every citizen of the country.
The plain truth is that we are living beyond our means, and that the nation is actually spending money that is not there, with the inevitable consequence either that we land in inflation, or else impose a much lower standard of life on every single person in the country. At the moment, inflation has been largely resisted owing to the refusal to grant wage

demands, with the result that the standard of living has become gradually depressed, and it will become much more depressed when it becomes evident that our commitments have increased, as they are bound to do, and that the yields have been less.
I am appalled that, on the Third Reading of this most important Bill, our Debate should be so sparsely attended, and that so little attention should be paid to it by the Government. This is the last chance in the great annual financial inquest of the nation before we go to our constituencies during the Recess. I wonder how many hon. Gentlemen opposite when they go to meet their constituents will point out that our salvation stands or falls by our internal economic health, which, in its turn, stands or falls upon whether we can remove the inflationary pressure that is bearing so heavily upon us. Do not let us forget one other thing. If we have a fall in our standard of life, which at the moment seems inevitable, that will bear in its train a steady encroachment on our civil liberties.
My third point is the familiar one of the disincentive effect. I do not see how it can be contended that high taxation, direct or indirect, does not hinder greater output and greater efficiency because that applies equally to wage earners or to directors of companies. How can anybody deny that when companies pay up to 70 per cent. of their profits to the Government? How can anybody deny at the present time that the high Excise Duties tend to make people demand wage increases? How can anybody deny that if a man is already paying a very high rate of Income Tax and Surtax, he is unwilling to take on more work and new commitments in the industrial ventures of this country? How can anybody deny that the salaried class with the present rate of tax is bound to demand higher rates of salaries?
My fourth point is that all of us, on whatever side of the House we sit, and everybody in the country, are guilty of focusing our attention too much on our external difficulties. We do that partly because we are under the impression that those difficulties are largely due to factors outside our control, and that therefore it is useless to worry overmuch about them. Our internal economic health is the prime factor in considering our


external difficulties. Whatever solution, or partial solution, there may be of our external difficulties, and whatever help we may get from America or elsewhere, or through greater co-operation in Europe and throughout the Commonwealth, all that will be completely vitiated unless we can remove the effect of inflationary pressure at home.
We in this House cannot control many of the factors affecting our external position, but we can and must reduce taxation. I am afraid that all of us—and particularly hon. Members opposite—will get a rude awakening next year. I wonder how the speech of the hon. Member for Sowerby will read then, and if he will read it himself with satisfaction?

Mr. Daines: Cheer up.

Mr. Nicholson: Cheer up! What is the good of whistling to keep up one's spirits when one sees the country being led gaily along the road to disaster by hon. Members opposite? They say that the very existence of high taxation tends to help industry. That is not only juvenile and pathetic; it is disastrous. I would exclude no single item of expenditure from our survey in order to see where economies can be made. I do not see, whether it is for defence purposes, social services, food subsidies, interest on the National Debt, or anything else, how one can honestly do otherwise.
There is no hope of survival for this country unless within the next year or two we can reduce our expenditure by many hundreds of millions of pounds. I cannot give the exact figure, of course, and if I tried to give a specific figure it would be only guesswork. I do not believe that any State that exists in the world today, or which has ever existed, could possibly survive if 40 per cent. of the productive earnings of the average man and woman has to be paid to the State by way of taxation. So much for the purely economic aspects of the question.
I wish to address my few remaining sentences to the Chancellor of the Exchequer. I am sorry he is not here, but I am the last person to charge him with discourtesy because, unlike some right hon. Members opposite, he is always prepared to listen to speeches made even by back benchers on this side of the

House. I believe that a great responsibility rests on the right hon. and learned Gentleman's shoulders—a greater responsibility, indeed, than he realises. It is within his power to become a great national leader and to give a national lead to the country which will bring us back to the path of sanity. I can see the difficulty in which he is placed; he wishes to carry his party with him, and, therefore, he has to play up to the Left in party, and, at the same time, try to lead us on to a sound path.
The first thing I wish to ask him is not to delay too long in coming forward as a great national leader, because our life blood is slowly but surely ebbing away. Secondly, that he has established a great reputation for integrity. By integrity, I do not just mean honesty; I mean being consistent, being the same all the way through. It is most important, not only for the right hon. and learned Gentleman, but for the nation as a whole that he should maintain that reputation for integrity if he is to get all sections of the country behind him. He cannot maintain that reputation indefinitely if at one moment he makes great resounding idealistic national speeches and then the next moment plays the lowest sort of party game.
I am particularly anxious not to be offensive and not to appear to be offensive. I do not mean to be, but I would remind the right hon. and learned Gentleman of the great temptation which besets men in prominent positions to exploit their reputation whatever it may be, for integrity, courage, brains or skill, in the interest of personal ambition. I am not accusing him of doing that, but I do ask him to bear that danger in mind. I regard the situation as very grave. A lot of it is outside our own control, but our internal economic condition is within the control of this House. I think that we are all—myself included—committing a crime even in acquiescing in this Budget. Heaven send we do not commit the same crime next year.

5.57 p.m.

Sir Peter Bennett: We are parting with a Finance Bill which puts our expenditure and taxation at a very high level. That is admitted, but what has surprised me this afternoon is the way in which certain hon. Members opposite have tried to suggest


that this high taxation is almost a virtue. They cannot be genuine. The hon. and learned Member for Northampton (Mr. Paget) suggested that industry is really fortunate in having this high taxation. He implied that if they did not have it, many things would not be done, that they would have to do certain things themselves, and that the expense of doing those things would fall on them. The suggestion has been made that wage increases would be asked for. It is quite evident that hon. Members opposite who speak in that way have never had anything to do with wage negotiations.
I can assure them that if in such negotiations it were to be suggested that because of the services that were given by statute or that industry was obliged to give, plus any they gave voluntarily when they could afford to do so, the workers should drop all applications for wage increases—if that were suggested by hon. Members, I say they would get no change whatever. The workers say quite rightly, that they take all that and then want to be paid for the labour they render. To say that high taxation is an indirect service to industry is completely to misstate the position. To say that it has no relation to the high costs is also a misstatement, as is the suggestion made by the hon. and learned Member for Northampton that we are having trouble in the world today not because of high costs, but simply because people will not buy our goods.
There is a certain amount of truth in the statement which the hon. and learned Member made about the United States. They have a high tariff policy, and there are the pressure groups. If we got in, we should probably find them working to get us out again. There are, however, a large number of articles which we can supply to the United States and on which pressure groups are not working. We could sell a great many more motor cars in the United States if only our prices were comparable, size for price. It would not be in the quantity in which the Americans make cars, but the American manufacturers themselves have said that as long as it is only a small number, it would not pay them to tool up and they would not make that particular type of car. If we could send 100,000 motor

cars to America, it would earn a great many dollars. The reason we cannot do it is that our costs are not right. I believe we could sell a great many more goods if our prices were right.
I have just returned from a visit to America and Canada and, whatever the hon. and learned Member may say about America not wanting our goods, that is not the case in Canada. The Canadians are most anxious to buy our goods and there is no suggestion that they will keep them out. They know that this country is the market to which they send their produce and that their produce has to be paid for. In the old days it was paid for by triangular multilateral trade. Today it is not being paid for and the Canadians are begging us to come and see what they want and to send our goods.
Everywhere I was told, "The trouble is that your prices are too high." It is not the case that tariffs are causing this difficulty, because the Canadians are buying from the United States who have the same tariffs to surmount. The Americans are getting the market and we are not, and the reason is that our costs are too high.

Mr. Deputy-Speaker: I think the hon. Member must relate the high cost of production to taxation, otherwise it is not relevant on Third Reading.

Sir P. Bennett: You did not hear the arguments put forward earlier. Mr. Deputy-Speaker. I was trying to show that our costs are too high, and in industry we maintain that one of the reasons they are high is the enormous burden of taxation which we carry. The hon. and learned Member for Northampton (Mr. Paget) suggested that this is a benefit to us instead of being a burden and I have tried to show, from personal experience, that he was quite wrong, that we must get our costs down and that one of the ways to do it would be by reducing the burden of taxation which industry has to carry.

Mr. Mitchison: On a point of Order. What is the connection between the cost of production of a motor car, as distinct from the profits on it, with anything in this Finance Bill?

Mr. Deputy-Speaker: I was just drawing the hon. Member's attention to the


fact that he must keep slightly closer on Third Reading to the contents of the Bill.

Mr. R. A. Butler: I think it is true to say that the hon. and learned Member for Northampton (Mr. Paget), when unfortunately you were not in the Chair, Sir, was able to develop his argument at some length, and my hon. Friend the Member for Edgbaston (Sir P. Bennett), no doubt without fully realising the position, is simply following the argument adduced by the neighbour of the hon. and learned Member for Kettering (Mr. Mitchison).

Mr. Mitchison: Is there any reason why, a person having gone down the wrong road and having been warned that he is on it, should then continue on it?

Mr. Deputy-Speaker: I think the hon. Member for Edgbaston understands the position.

Sir P. Bennett: I have made my point and to my own satisfaction I have completely demolished the arguments of the hon. and learned Member for Northampton. I am sorry that he is not here to admit it. No doubt he will read what I have said and if he does not agree he will tell me so.

Mr. Benson: Before the hon. Member leaves that point perhaps he will explain something to me. He is a great industrialist and we always listen to him with very great care on industrial matters. Would he tell us from his own experience, and in his own industry, how taxation enters into the cost of production?

Sir P. Bennett: That is not in the Bill and it would take me a long time to deal with that point. I shall certainly have very great pleasure in discussing that matter with the hon. Member at our leisure, but we could not do it in the time at my disposal today, nor is the subject in the Bill.
The point I want to make is one, I think, in which he will follow me, and it is on depreciation. We have heard a lot about the concession which has been made in the Budget by the increase in the initial allowance for depreciation. As we have tried to point out, and as my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) certainly pointed out, we are not getting anything

at all; we are only having our entitlement a little earlier than we should ordinarily have it. In the long run we shall get exactly the same amount allowed to us under this scheme as under the previous scheme or the old scheme we had before the war, when it was averaged over the whole period.
This concession is not really what industry has been asking for. It is grateful for this little interest-free loan, which is all it amounts to, but the problem remains. Before the war we were depreciating at 10 per cent. per annum. Of course, it was not exactly that, because, as everyone knows, it is on a diminishing figure, but for the sake of clarity I will say we depreciated at 10 per cent. per annum. At the end of 10 years we had sufficient to replace our plant. Now that plant is costing, hon. Members might say, twice as much; as my right hon. Friend the Member for Saffron Walden said, in some cases it may be three times as much. What happens when we come to accumulate the amount of depreciation? We have only half the amount necessary to replace our plant.
Therefore, it is said, we must make provision ourselves, and so we set out, if we can, to make provision. We say we will double the amount of our depreciation and, instead of depreciating at 10 per cent., we will depreciate at 20 per cent. But we are allowed only 10 per cent. in our negotiations with the Revenue, so that the second 10 per cent. has to pay tax, which means at least another 10 per cent.; and so, in order to replace a tool today, if it is to cost us twice as much, we have to depreciate at the rate of 30 per cent. If it is to cost three times as much for the same plant it means that we have to depreciate at 50 per cent. per annum in order to replace it.
When that is explained it will be realised how serious the position has become in industry. We are accused of not keeping our plant up to date and of not competing with the Americans, and we are told that we are not efficient. We shall never be efficient unless we are allowed to depreciate the value of the plant so that we can replace it when the time comes. I asked my accountants to work it out, and they told me that under the present rules and regulations our plant is supposed to last 26 years. If it takes me 26 years to replace my plant, what chance


have I of complying with the exhortations from all quarters to be more efficient? It is quite impossible, and for that reason industry is asking the Government if it cannot be done in this Budget, to consider the question and go very carefully into it because industry is running short of money. New issues are coming out. They will come in a flood and the finance will not be there. One of the reasons why we are facing the future with so much concern is that we can see our plant running down, we cannot see the ways and means of replacing it, and we know that the whole nation will suffer as a consequence.

6.8 p.m.

Mr. Scott-Elliot: I hope the hon. Member for Edgbaston (Sir P. Bennett), to whose views we always listen with the greatest respect, will forgive me if I do not comment on the points he has made. I shall not detain the House long, but I want to say a word on behalf of the Executive Committee of the National Trust—a word of thanks to my right hon. and learned Friend for what he has done for us under Clause 27. Hon. Members may remember that this Clause provides for the exemption from Death Duties of money bequeathed to the National Trust as an endowment in respect of properties which may be made over to us. We consider that that will be very valuable in view of the great difficulties that we are likely to have in maintaining our properties in future.
Arising out of that, I hope the public will understand first, the importance which the Government attach to the work we do and, secondly, the fact that the Trust depends upon public subscriptions and bequests. There are far too many people who seem to think that the National Trust is itself some kind of Government Department. Of course, it is nothing of the kind. It depends entirely on support from the public, and only if that support is forthcoming in sufficient measure will the Trust be able to carry out the great national work which it has done in the past and which it hopes to do in the future.

6.10 p.m.

Sir Stanley Reed: If I go over a certain amount of ground that has been traversed before I hope I may have

the forgiveness of the House, because it seems to me that the one major point I want to put before the House has been mentioned more than once already. I think every hon. Member wherever he may sit, has a profound respect for the hard, realistic Budget which the Chancellor presented for our consideration. We value its lucidity; we value its courage; and we value its foresight. Now, however, that that Budget has gone through the House almost without the change of a comma, certainly without the slightest material alteration in the scale of taxation and expenditure, I would ask the House to consider what it really means.
What is the plain, stark fact that we have to put before the country for its consideration now and when the election comes? Does it not narrow itself down to this one straight issue, that taxation is taking 40 per cent. of the national revenue, that expenditure is £3,700 million on our general account, and that there is an overall surplus of only £14 million? With some branches of taxation working out the law of diminishing returns, we have this overall surplus of £14 million; and with all respect to the Financial Secretary, in the one branch in which they have attempted to arrest the fall in returns, that is, in the penny on beer, the law of diminishing returns may operate yet as it has already done. April was a very hot month, and May a cold month, and now we are back in the hot weather again, and the possible slight increase the right hon. Gentleman welcomes will have been due to the hot weather in April.
The overall surplus is £14 million. The House should mark the figures which my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) has put before it today. If those figures are borne out by the law of diminishing returns, there will be no surplus and there may be a heavy debt. How are the Government to face the deficit with the present scale of taxation, with the present yield of taxation, and with the possible further yield of taxation, looking to the effects of the beer duty; and what will be the effects if there is a reduction in industrial profits? What provision are the Government making? What margin have they left? I ask the Economic Secretary, who is to reply to the Debate for the Government, to give special consideration to the figures that my right hon.


Friend put before us today, because I venture to think they are of profound significance, and they cause us a very great deal of anxiety.
I have listened to most of this Debate, and have heard admirable suggestions made from this side of the House for a reduction in Income Tax, for a reduction in Purchase Tax, and for abatements here and for abatements there, and I have listened to the arguments produced by the Government. With all respect to them, let me say to them that if they were to abandon those fine-drawn non possumus arguments, their task would be easier and this House would be better content. After all is said and done, any realistic and reasoned survey of the Budget statement and of the facts put before us by the Government leads to this point, that the Government dare not reduce taxation at the present time. They dare not reduce taxation because that would upset the whole of the balance of the Budget.
Although they may use those fine arguments, the plain fact is that I do not think any Minister, in my recollection as a Member of this House, was ever put in a more painful position than was the Postmaster-General when he was sent down to justify an increase in the telephone charges. What he had to say, in effect—although he was not allowed to say it—was that the Chancellor must draw in revenue from wherever he can get it, and so he proposed to use what should be a public service as a vehicle for increasing taxation. That is a thoroughly bad thing in any national service and most of all in the Post Office.
Last night we listened to a careful and legalistic argument by the Solicitor-General on the readjustment of the Estate Duty. The right hon. and learned Gentleman is one whom we all greatly respect, and to whom we are indebted for the courtesy with which he invariably treats Members of this House, but why did he not say quite frankly in that fine-drawn argument what really was the revision of the Estate Duty? Simplification of it is necessary, and everybody who administers estates will benefit by simplification and will welcome it, because the complexities of the business take time. But what did the right hon. and learned Gentleman say? It was not just a readjustment and simplification of the Death Duties but a

further grabbing in of another £20 million of revenue, and the sweeping in of £20 million of capital into the general account, thereby destroying for the future that amount of taxable capacity.
Whereas we are taking this 40 per cent. of the national income, economists have warned us that 30 per cent. is as much as can be taken with safety without endangering the security of the body economic. The Economic Secretary is a trained and highly competent economist. Perhaps he may say we should never listen to economists. I have asked myself what an economist is. I have come to the conclusion that an economist is a man who takes a result from a set of figures and says that every other economist who produces a different result is wholly wrong. I take what is a considerable consensus of opinion amongst economists, which is that 30 per cent. of the national revenue is as much as can be safely taken for the purposes of taxation. Yet we are taking 40 per cent.
I wonder if the Economic Secretary will justify that in the light of our position? Like other Ministers, he extends to us a generous invitation to go over to that side of the House and do his job for him. That is an invitation I do not propose to accept now. Perhaps, a year hence I shall be called to act upon his advice, with others, and thereby take this work in hand. I must express the earnest hope that the country will understand the unvarying and inexorable facts that we are taxing up to the very limit of our resources, and that in some respects we are taxing up to the law of diminishing returns. We are absorbing the whole of the national taxable income. We may be absorbing more than that in the national expenditure.
How are the Government going to provide for any recession in our economic positon as long as our present scale of expenditure is maintained? There is no escaping the fact—absolutely none—that we are taxing to the maximum. It is of no use for the Government to come here and ask us, "Do you mean to cut defence? Do you mean to cut the social services? Do you mean to cut the food subsidies?" Only the Government are in possession of all the knowledge which is necessary for a decision. Only the Government have the power to apply that knowledge. On the Government rests the


responsibility of so applying it that we may meet the future without a resort to inflation, which will be disastrous to all the community, and not least—indeed, most of all—to the wage-earning people in our community.
I do not want to indulge in pessimism. The last thing I would indulge in is "sob stuff" with regard to the social services, which are now so great a part of our national life, and for this very good reason: that my memory of our social and industrial conditions goes back to the late 'eighties and early 'nineties; I know what conditions were like in our great industrial cities in those days; I know what horror there was of unemployment, the Poor Law and the workhouse. Therefore, I for one feel a sense of immense and proud satisfaction at having taken a part, however small, in that great work which is bringing so much happiness, security and great improvement in the national health today.
Nevertheless, I cannot disguise from myself that in the present state of the world all those great social services, with all the immeasurable benefit they have brought, are today so delicately poised upon an unstable economy that unless we can bend ourselves to the restoration of a stable economy and buttress that stable economy, all that for which two and three generations have worked, the success of which now seems almost to be firmly in sight, may be in peril. That is my fear: not on the burden of taxation so much on myself and others, but the reflection of that taxation upon our social system and our social security.
I therefore ask the Government to make it quite clear, and to put the straight issue before the House and the country now and in the future, and above all when the testing time comes, so that we may feel that all that human nature and human power could do has been done to make the work of these years not only supremely beneficial but firmly based on a stable society and a firm and impregnable economy.

6.22 p.m.

Mr. Mitchison: I hope I may be able to do something to relieve the histrionic and fallacious gloom that appears prevalent on the benches opposite. There was first of all the hon. Mem-

ber for Farnham (Mr. Nicholson). The statement in his speech that surprised me most was his assertion that all economists agreed with him. We can look into that in a minute. Having compared himself, I thought rather unkindly, to the Gadarene swine and complained of the scanty attendance in the House, he immediately absented himself and rushed away somewhere—no doubt downhill, to judge from the tone of his speech. Then there was the hon. Member for the Edgbaston Division of Birmingham (Sir P. Bennett), who told us that industry was going to the dogs. Having delivered this momentous verdict he, too, disappeared to some kennel or another, and we were left with the hon. Member for Aylesbury (Sir S. Reed). All I can say about him is that I am glad to recognise a certain similarity of ducks all over the world, and to know that in Aylesbury as on Ilkley Moor apparently they eat worms.
I am sorry for hon. Members opposite that they should feel like this. I think they might consider a little bit more what happens to the 40 per cent. of which they have so consistently complained. They talk about its being taken. We were told, for instance, by the hon. Member for Edgbaston that taxation had no conceivable effect on wage negotiations or, apparently, on the level of wages. I wonder whether hon. Gentlemen opposite would remember one or two things? If taxation were not levied there would not be a National Health Service. There would then be more illness in the country and more of the inevitable waste that comes from illness, so that expenditure which is now borne out of the funds levied by this Finance Bill would fall on individuals.
Now that money is not taken by some mysterious person who hides it away in a cupboard. It is taken for a use for the benefit of the community, and it is as truly an economic advantage if it is used on a public service as if it were used on a similar private service, with the added advantage that in the case I have given the public service has proved to be both more efficient and more equitable than the private one ever could have been.
As regards wage negotiations and the level of wages, does the hon. Member for Edgbaston really suppose that if the price of food in this country were to be given


the sharp rise that must inevitably follow dealing with the food subsidies in the way he and his hon. Friends have from time to time suggested, that would not have an immediate effect on wage demands and would not add further in that respect to the costs of which he is already complaining? I think it shows an entire sense of unreality to divorce in this way what is done publicly from what is done privately.
Those are questions of means. But in view of the end in this case, whether it is the health of the population and therefore the avoidance of waste in that way, whether it is the ensurance of an adequate minimum living standard by food subsidies and the consequent avoidance of the waste that follows from starvation just as much as it does from ill-health, or whether it is the avoidance of the waste that arises from unemployment by the judicious expenditure of public money, in the one case and in the other, the use to which the revenue we are about to grant today is to be Put is highly relevant.
The question how far these desirable objects should be attained by a public service or by private enterprise is indeed one which divides the House acutely. But to say that the objects may be entirely neglected in the one case and only considered in the other is to import an element of unreality into our discussions which only reflects the complete unreality in the criticisms that are made by hon. and right hon. Gentlemen opposite on the policy of this Government. There were several instances in the course of the speeches to which we have listened.
I come back to what, after all, is perhaps the main burden of criticism. We are told that we cannot afford this expenditure; that it must in some way or another be reduced. I find myself entirely unable to attach any real meaning to that, unless the use to which the expenditure is put is also to be considered. When I am told that in some way or another there is some absolute truth known to all the economists and the hon. Member for Farnham, as well as to the hon. Member for Aylesbury, which makes it imperative that the expenditure should be reduced, then I assert that those who say that must at least face up to the consequences of that which they are so strenuously

demanding; and without calling upon them to fulfil the rôle of my hon. and right hon. Friends on the Government Front Bench, I can at least say that it is wholly unreal to ask for something, unless the consequences of that which is asked for are also considered. In this particular case if they call for the reduction of taxation so strenuously, the inevitable result will be to leave the Exchequer with less money and somewhere or another a reduction must be made.
We have heard much about uneconomic expenditure. From one point of view, perhaps a narrow one, the obvious uneconomic expenditure in this country is on defence. It is the one expenditure which hon. Gentlemen opposite do not wish to reduce. So far as I can ascertain what their wishes are, they desire to reduce just those expenses, which, in fact, have a beneficial economic result such as education, the Health Services, National Insurance and National Assistance. They vary in their criticisms. No one would accuse the right hon. Gentleman the Member for Saffron Walden of wishing to reduce expenditure on education, but he particularly, as one who is charged with the higher policy of his party, whatever it may be, should be in a position to tell us which of the other services he would like to have reduced.

Mr. R. A. Butler: Had I been permitted by the Chair I might have given a lecture not only on Conservative policy, but on all the aspects to which the hon. and learned Gentleman is referring, and also various forms of aquatic sports and other matters not included in this Bill. Unfortunately, I had to keep within the rules of Order.

Mr. Mitchison: I appreciate the right hon. Gentleman's difficulty on this occasion, but I think he will remember that it is not the first time that he and his friends have been asked what it was they meant to save on.

Mr. Speaker: The hon. and learned Member cannot deal with what is not in the Bill. He cannot discuss something which is outside the Bill.

Mr. Mitchison: I shall leave that subject entirely. I can do no more, and I hope that at some future opportunity we shall hear of it.

Mr. Kirkwood: Let that flea stick to the wall.

Mr. Mitchison: For a moment I want to turn to one other thing. As I see it, this is not a Finance Bill of major importance for what it does, but it is of major importance in that it shows courage and good judgment in refraining from what is an attractive invitation to a Chancellor of the Exchequer towards the end of a life of a Parliament—to give a concession here and there. With courage and judgment it has been shown that these concessions could not be made and, therefore, were not made, as indeed has been recognised on both sides of the House. It seems to me that at this juncture of our affairs it is exceedingly important that we should make it clear to the world at large that we are not going to be deterred by what we might call the cheapest of democratic considerations—into any unbalancing, on a long view, of the state of our finances. That tribute ought to be paid and the justice of it has been recognised on both sides of the House.

6.34 p.m.

Mr. Charles Williams: The hon. and learned Gentleman the Member for Kettering (Mr. Michison) began his speech by asking the Tory Party to cheer up. There are various ways of cheering up people, but the lugubrious speech of the hon. and learned Gentleman, which was so full of dismal matters, was such that no one could possibly be cheered by it; it was the type of speech which would hardly go down in the driest Scottish circles. I know he will excuse me if I do not follow him in the line that he took, because while his skill is great, mine is very minute and I could not hope to follow him in that respect. I should like, first, to refer to one or two improvements which have been made in the Bill during its passage through the House. I thank the Government for the fact that we have been able to improve the position of amateur dramatic societies and matters of that kind. It was a benefit which was extracted from the Government after some argument.
There were various ideas to start with, but, at the end, most people realised that the suggestion came through the ingenuity of the hon. Member for Torquay, as so much in this House does from time to time. However, I would not like to refer any more to that. At

any rate I have managed, in the first minute or two of my speech, to make the hon. and learned Member for Kettering laugh, and I have never seen him laugh before except at his own jokes, which nobody else laughs at in any case. I do not want to be drawn into any argument on this matter of the concession to amateur dramatic societies. I approve it wholeheartedly. I feel really better for it. On the other hand, I cannot see how taxation will be reduced, because, however much one approves of the Budget it is giving very little to industry.
Yesterday, the Chancellor of the Exchequer reproved the Conservative Party because we had made it a point up to the time of this Budget, that if a man left his money to his wife he would pay a lower rate of duty than if he had left it to a naughty lady. If I had said, four years ago, that one of the things the present Chancellor of the Exchequer would do would be to equalise the position of the legitimate wife and someone else as far as Death Duties are concerned, I would have been told that I had let my imagination run away with me. Yet, after hearing the Chancellor of the Exchequer's speech yesterday, we now realise that it can happen.
In dealing with that matter the right hon. and learned Gentleman, in one of his more sanctimonious speeches, began by saying:
As I have to go in a few minutes…"—[OFFICIAL REPORT, 11th July, 1949; Vol. 467 c. 107.]
In other words, throughout the proceeding on this Bill, he was very often absent. There has never been a Chancellor of the Exchequer who has been in the House so little. I quite realise that he has other duties to perform, but it should be noted because it is not very hopeful for the future. He ended the speech which he made yesterday by pointing out that his object in dealing with inheritances as he did was to allow greater freedom to the testator. The right hon. and learned Gentleman says that the testator can do anything he likes, but if the testator does something foolish the Chancellor can go on to an election platform and ask why should he be allowed to inherit anything. That was a most ingenious plan and, if we had followed the Chancellor's speeches in the past, I have no doubt that we should find that he has made very full use of it.
We say that people should be encouraged, rather than discouraged, to leave their money to their families, and that we should make the rate of duty less in that case than where the money is left to persons outside the family. That may be interfering in a limited way with the freedom of the testator, but we must remember the enormous amount of interference when the Treasury take up to 80 per cent. of his estate. The plea made by the Chancellor was, therefore, very weak and worthy only of the lowest type of electioneering.
We are told that the Chancellor expects £185 million from Death Duties in a full year. Previous to the war, at a lower rate of duty, the Treasury got £80 million a year. We heard from the Government Front Bench yesterday a complicated argument in support of taking all that money, and of putting it into capital expenditure such as houses and buildings. If we compared £185 million today with £80 million before the war, when spent on capital equipment, we should find that we did not begin to get an equivalent result, although the Chancellor is raising double the amount of money. Therefore, the Death Duties are beginning to be a hopeless failure because the Government have depreciated the buying power of money. Although they are taking more nominal pounds, the effect is very small when they try to use it for replacement of capital.
We heard yesterday about the Government taking over a new farm in Wales. What will happen? They will have to put capital into the farm. Suppose they wish to spend £100 upon a drain. That will be new capital expenditure. I can tell them that they will get in direct labour, for their £100 about the same as could have been obtained for £40 before the war. The Government have continued to take from the capital of this country and use it in ways which are not productive, until the £ is incapable of developing industry as it should. I agree with my hon. Friend the Member for Edgbaston (Sir P. Bennett), who said that although the Bill will give a definite lead in a small but short-term way, in respect of depreciation, there is no relief from the enormous taxation which the Government take directly, such as Income Tax, and which should go into the re-building and increasing of our capital.
The Government are taking out of one industry and another something like £100 million a year, which should be conserved in industry. It is wrong for the Chancellor of the Exchequer to tell industry that it is not developing and, at the same time, to do all he can to prevent development. The lectures of the Chancellor are worthless. They are doing very little good in the country. As a lecturer the Chancellor is supreme, as a lawyer he is amazing; his language is wonderful, but his effect upon the electorate is not very great at present, and not such as I would like to see it.
I said just now that there had been amazement in my constituency and anywhere I spoke, when I told people that the Chancellor was endeavouring to reduce the position of a few married women, and was actually succeeding. The number may be only 10, but it is there. What an amazing thing it is that the Chancellor, who is always talking about abstinence and is always being held up to the country as such a good man, should be the person to reduce the price of beer by 1d. Just imagine what would have been said about the Tory Party on such an occasion as this, in our present financial position, if we had reduced the taxation on beer by 1d. I am glad the Chancellor has done it. It was a small act of courage. It would have been better if he had done more in other directions, such as taking 1s. off the Income Tax. Exactly the same thing would have happened. We were told yesterday that the reduction of Beer Duty was already beginning to have an effect. The Chancellor has taken our advice in reducing the tax on beer. I would like to see him introduce a short special Budget to amend some of the early Clauses of the Bill and certain others, but I fear that he will not be sensible enough to do that.
A point raised yesterday concerned a small principle in Clause 13. Although, under the safeguarding duties, the Board of Trade have power, in particular cases, to reduce the duties, it was to be done in the interests of trade as a whole and only if a sufficient amount of the article in question was being produced. Imports could then come in for a certain time. That was quite natural. It was introduced by a very sensible Government, and it was a reasonable proposition.
It is not reasonable but is grossly dishonest for the Board of Trade to use the power to give relief from duties not in the national interest but to give a hidden subsidy to one of the incompetently-managed Government airway corporations. That is done not in the general interest or for greater production but merely in respect of one type of aeroplane of 120 ft. wing span. That sort of thing will bear more heavily on English producers by taking away their protection, and it will be used as a means of giving an underhand subsidy to a Government industry. We shall have to consider the whole question of these duties. For a very long time it has been realised by some people that if the Socialist Party came into a tariff country they would use tariffs in a grossly unfair way to encourage Socialism and hurt and injure other forms of trade and industry.
I do not think I need say very much further about this Bill. [HON. MEMBERS: "Hear, hear."] I am glad to hear those cheers because I was about to say that the Bill does little to encourage industry and in case after case does more to discourage industry than almost any Budget of which I am aware, I deeply regret that the Chancellor did not use his position to come here today, not to scold or to tell people how bad they are, but to do something to rebuild trade and industry, which is so necessary at present.

6.52 p.m.

Mr. Nigel Birch: We have had a very eloquent speech from my hon. Friend the Member for Torquay (Mr. C. Williams). I was glad that the blinds were raised at the end of his speech so that the sun could shine upon him, as I believe it always does upon his constituents. The only point upon which I disagreed with him was when he praised the power of language of the Chancellor of the Exchequer, but that is a point to which I shall refer later.
When I had the honour to address the House on the Budget I said that it was a climacteric Budget. I should now say that the turning point has passed and that the policy in this Bill is coming to an end. The policy incorporated in the Bill is the policy of deflation, or, if the Chancellor of the Exchequer attaches importance to his figleaf of disinflation, the policy of deflation by high

and increasing taxation. We have always warned hon. Gentlemen opposite that if they sought to balance our internal economy not by cutting expenditure but by increasing taxation, the results would be both dangerous and unpleasant.
The hon. Member for Sowerby (Mr. Houghton) said that this was a standfast Budget. Is the economic position of the country a standfast position? When we are losing gold at the rate of about £1 million a day, I should have thought that "standfast" was the very last word which one could have applied to what was going on in the country. Like all other Socialists, the hon. Member made no reference whatever to that aspect of our economy. The truth is that at the very first breath of the buyers' market, of which the Chancellor of the Exchequer has so often warned us, the whole house of cards built by hon. Gentlemen opposite looks like falling down.
Many of the things in this Bill account for the danger of our present position. There are both big things and small things, and I shall start with one or two of the smaller things. My right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) said a few things about Customs and Excise and pointed out that the revenue was falling. The revenue is falling on commodities consumed in this country on which high indirect taxes are paid. Although the right hon. Gentleman the Financial Secretary denied it, that is why the Beer Tax had to be reduced; the consumption was falling. That is why the tax on wine has had to be reduced. Money was going to purchase other commodities upon which the tax was not so high, thereby, on the whole, damaging our economy. The same thing is happening in regard to spirits, and the same thing is likely to happen in regard to commodities subject to Purchase Tax.
Therefore, as far as indirect taxes are concerned, we are reaching the stage of diminishing returns. This reinforces my statement that the policy is coming to an end. We see it on a bigger scale in regard to the doubling of the initial allowances. This doubling of the initial allowances is, first, an admission of continuing inflation, because initial allowances were originally granted in 1945 in consideration of the inflation which took place during the war, and they are now doubled in consideration of the inflation which has


continued since the war. The second admission is of the inequity of taxation placed upon company reserves. If that taxation was not inequitable, this clumsy and wholly inadequate solution would not have been put forward.
Some very wise words were said upon this subject by that distinguished ex-member of the Board of Inland Revenue, Mr. Chambers. This is what he wrote recently:
Whatever the true figures, what is quite certain is that the figures for 'net capital formation at home' in the Government White Papers give, no doubt unwittingly, a false picture, and one which in no way reflects the danger that the physical capital in industry, as distinct from its money value, may be declining. The accounts of many, if not most, industrial concerns, also give a false picture because they, too, make their provision for depreciation upon what the assets cost originally, and not what it will cost to replace them.
There he was pointing out not only that the prognosis in these White Papers is wrong but that the actual stated facts are misleading. These White Papers are distorting mirrors paid for by the public.
The truth is that for every £1 given in wear and tear allowances, earnings of at least £3 are required to counteract the rise in the price level alone. This taxation of profits which are due to inflation and which are not true economic profits at all is taking a toll of our existing capital assets. That is why high retained profits in industry are absolutely essential, because it is from retained profits in industry that our main savings come, as my right hon. Friend the Member for Saffron Walden pointed out. The Chancellor said that savings might be inadequate but we would save through a Budget surplus. Probably the Chancellor will not get a Budget surplus, but in any case, the high taxation required at the present level of expenditure will simply result in dis-saving by the public. We see that small savings have gone down £10 million already this savings year, and no doubt, if the figures were available, we should find that the big private savings have decreased by a very much larger figure.
This very high taxation of retained profits in industry should be contrasted with what goes on elsewhere. In the case of big corporations in the United States the tax on undistributed profits is equivalent to 7s. 6d. in the £—it is less in the case of small corporations—

whereas here it is over 10s. in the £. This process means a loss of competitive power, inflexibility in our economy and social immobility leading to industrial inefficiency. That is why the Chancellor was so reprehensible on Second Reading when, in one of his "mad parson" moods, he talked about "frightfully high profits" without mentioning that the figure he gave was a gross figure and did not represent the true economic profits, and that much higher figures were essential if we were to maintain our place in the world.
But with the morning cool repentance came.
He more or less unsaid what he had said at Blackpool, and so we will let him off with a warning.
The most important effect of this Bill is the sum total of all the taxes together and what effect they have upon our economy. The effect they have on our economy is rising prices and rising costs and rising wages. It is all very well for the hon. Member for Sowerby to say that it is really only a redistribution and, therefore, we should not worry about the burden of taxation and a man should not worry about the indirect taxes he has to pay on beer, tobacco and so on. The short answer is that it does not work out like that.
We have always pointed out that every time in history when taxation has approached this level there has been the same result—costs and prices go up. That has happened here. It is working out exactly according to the book and exactly at the pace laid down. It is the main thing that is causing the loss of gold and the precarious state into which our economy has now fallen. No good intellectual answer to this proposition has ever been given by a Socialist. The general theme is, "It cannot happen to us, we are the chosen people; for us economic history has stopped." That is what most of the speeches opposite really mean.
And when prices go on rising and gold goes on flowing out, what do we get? We first get exhortation, this flood of stuff from the Chancellor in his wretched, broken, commercial Johnsonese which he thinks will have some effect on us. Exhortation never has much effect on the people of this country; I am devoutly glad to think that they never react to that sort of tripe. When exhortation does not


work, the Minister of Health insults people and says that they are enjoying prosperity beyond their moral stature. That does not work either and now, when all these things have failed, the last resort is tears. We have whimpers from the Minister of Fuel and Power and, from the Minister of Health, the shriller cries of arrested political puberty.
It will not do. The present state of our affairs is well summed up, without naming names, in the report of the Bank of International Settlements which came out a short time ago and which should be compulsory reading for the Chancellor once a night for the next 20 nights for a start. I shall quote a short extract from that report because it is extraordinarily apposite to this Bill:
If a country is in disequilibrium because its budget expenditure is too high or its investments are too ample or costs are maintained at an uneconomic level or the exchange rates have got out of line with realities (or there is a combination of two or more of these factors) with the result that an untoward deficit has arisen in the balance of payments—if in such a state of affairs the country concerned obstinately refuses to make any alteration either in its budget or credit policy or in its control of prices or exchanges—there is no reason to suppose that lack of equilibrium will not continue and this will mean that the monetary reserves of such a country will be eaten into and the proceeds of foreign loans and grants wasted simply to perpetuate the rigidities which are at the bottom of its difficulties.
That is exactly what is happening here. The report ends with something which I wish hon. Gentlemen opposite would take to heart:
The receipt of foreign resources is of such great value to a country that they should not be wastefully put to uses which simply postpone necessary adjustments.
The cap fits. We have wasted foreign resources which have been lent and given to us, and one of the main reasons why we have wasted them is the policy enshrined in this Bill. I believe that, when we are living on foreign loans and charity, it is profoundly immoral to behave like that. Hon. Gentlemen opposite try to get out of it by blaming everybody else, including the Americans. That is the old excuse of the wastrel—slow horses and fast women—which has never been taken as a valid one.
The right hon. and learned Gentleman the Chancellor of the Exchequer has often

been favourably compared to his predecessor, but I doubt whether history will support that view. After all, the Chancellor of the Duchy of Lancaster never really expected to be taken seriously. When he said in mid-1947—
the contrast is most remarkable between the great difficulty of the overseas position and the relative ease of the purely domestic position, in which things are very much better and easier than we would have had any reason to expect two years ago"—
how could anyone be expected to take seriously someone who made that remark? How could anyone be expected to be taken seriously who said that bonus shares were a distribution of money? I know that the hon. Member for Norwood (Mr. Chamberlain) believes it, but no serious person does.

Mr. Cecil Poole: On a point of Order, Mr. Speaker, may I ask for your guidance? I fail to see the relation between much of what is being uttered, entertaining though it may be—[HON. MEMBERS: "Taxation."]—and what is contained in the Bill which is before the House and to which I understand we must limit our references on Third Reading.

Mr. Speaker: I gather that the Debate has been pretty wide all the way, and that this is on the background to the Bill.

Mr. Birch: The result of the financial policy of the right hon. Member for Bishop Auckland (Mr. Dalton) was that we were going the way to perdition but we were following the primrose path, and at any rate he could say that he wanted people to have a bit of fun on the way. The policy enshrined in this Bill means that we are going to perdition by only a slightly longer road—and where are the primroses? I doubt if the right hon. and learned Gentleman would recognise a primrose if he saw one. Indeed it may have been the right hon. and learned Gentleman whom the poet had in mind when he wrote:
A primrose by the river's brim
A dicotyledon was to him
And it was nothing more.
Where his character compares unfavourably with that of his predecessor is that he is successful in deceiving people. He has made people believe that the destination was not perdition and that so dreary


a guide must be leading them up the straight and narrow path. The truth about the position at the moment is that something extremely unpleasant will happen to us soon unless hon. Gentlemen opposite can get more money out of America. Socialists throw stones with one hand and hold out the hat with the other. Both are ignoble gestures.
The main part of the Chancellor's plan is to clamp down still more restrictions on the people of this country. The nearest parallel in history to the Chancellor of the Exchequer is Diocletian. He, at any rate, had the decency to retire to Salona to grow cabbages. The right hon. and learned Gentleman is a large consumer of cabbages; if he would now retire and produce them he would be doing some service to his country.

7.9 p.m.

The Economic Secretary to the Treasury (Mr. Douglas Jay): We do not seem to have had a formidable attack on the Finance Bill this afternoon. The hon. Member for Flint (Mr. Birch) drew freely on his familiar repertoire of wisecracks, vituperation and personal sneers and, as he always does when he has nothing better to say, dragged in his rather squalid personal vendetta against the Chancellor of the Duchy of Lancaster. The right hon. Member for Saffron Walden (Mr. R. A. Butler), on the other hand, asked me certain specific questions. He first asked how it was that Customs and Excise revenue was apparently falling below the estimate in the first quarter, and whether that presaged the collapse of our Budget expectations. I can assure him that the fall is due merely to seasonal causes. Owing to the fall in Purchase Tax receipts immediately before the Budget, because of Budget expectations, we collected less Purchase Tax in the early months of the financial year. I am advised that the revenue from football pools also tends to fall away in the summer months.

Mr. Nicholson: Is it not a fact that in past years the second quarter was usually much more buoyant, as far as Excise receipts are concerned, than the first quarter?

Mr. Jay: No. The case now is that Customs and Excise receipts tend to fall off in the second quarter. As a matter of fact, they have been coming in very

much according to our estimates. Therefore, the general deductions drawn by the hon. Member for Flint from this supposed deficit are quite unsound.
The right hon. Member for Saffron Walden also asked what revenue we should have raised by Income Tax on the new insurance benefits if we had not made the change which is embodied in the Bill. The answer is that theoretically, if we could have collected them, we should have raised £15 million. In fact, up to date, we have been able to raise only £3 million. We now lose in this respect, and gain a total of £13 million from the change by which contributions are not allowable for deduction purposes. Therefore, on balance, we are, as the right hon. Gentleman knows, £10 million to the good.
I noticed today that critics of this year's Budget seem to have changed their ground since it was introduced three months ago. In April there was quite a noisy attack on the Budget by those who said that our taxation proposals were altogether too severe in limited spending and consumption, and that we ought to have reduced taxes and abandoned our attempt to maintain an overall surplus and so let loose a higher rate of spending power. But in view of what has happened in the last few months, it is now obvious that the caution of my right hon. and learned Friend in the Budget was indisputably right and that those critics were hopelessly wrong.
This year's Budget and the taxation proposals in the Bill were founded mainly on the explicit conviction that what my right hon. and learned Friend himself described in his Budget speech as "the size and gravity of our dollar deficit" was the crucial national problem and that, therefore, any release of extra purchasing power by tax reductions must, by virtue of its inflationary effects on costs and prices, have made our central problem harder, and not easier, to solve. Indeed, the Government stated the central principle on which the Budget was founded in the Economic Survey in March, in which we said—in italics, in fact:
The dollar deficit remains the crucial problem.

Mr. Spearman: When the hon. Gentleman says that critics attacked the Government for


not lowering taxation, is he referring to critics on his own side of the House or on this side?

Mr. Jay: I am referring to any critic who made the sort of criticisms I have described.
It was for the reasons I have stated that we resisted the plea to relax our disinflationary Budget policy, and I can hardly believe now that anyone thinks we were wrong. It was also for that reason that we decided, as the right hon. Member for Saffron Walden pointed out in his remarks about industrial re-equipment, that one of the main reliefs in this year's Budget, even though it does not entail any cost to the Exchequer this year, was the increased initial allowance for depreciation. We have debated this a great deal, and it should be of substantial help to industrial re-equipment and modernisation and, therefore, to our progress towards dollar solvency. The right hon. Gentleman said that this was no free gift from the Government to industry. That, of course, is perfectly true; but it was an interest-free loan on a very large scale which, I think the right hon. Gentleman agrees, will be a big contribution to this object.
The main issue in the Debate today has been whether the high level of taxation enshrined in the Bill and the high level of expenditure that goes with it are injurious to our economic life. The right hon. Member for Saffron Walden described it as a "stunning level of taxation," and several other hon. Members, including the hon. Member for Aylesbury (Sir S. Reed), whom we are always glad to hear in these financial as in other Debates, pointed out that the total revenues amount to something like 40 per cent. of the national income. I may perhaps remind them that that includes all the spending of local authorities as well as, of course, of the central Government. That, it has been argued today, is imposing a burden on our industry which impedes recovery.
In the first place, as we have constantly pointed out, a great deal has been done, is being done, and will be done, to economise on all sorts of items of expenditure, in face, however, of constant demands from hon. Members opposite that individual items should be raised. They are

almost as loud in asking us to raise the individual items as in asking us to reduce the total. Secondly, of course, a great deal of our expenditure today, as in the case of insurance and health services, is a mere transfer to public account of what was previously carried out on private account, and makes no difference to the strain on our national resources.
I also think, judging by what the hon. Member for Torquay (Mr. C. Williams) said about Death Duties being an expenditure of capital, that hon. Members opposite have still not grasped that a considerable proportion of the sums raised in taxation, although they are current revenue according to our method of Budget accounting, are in fact being used for what is actually capital expenditure. That is true up to a point very much higher than if one considers the revenue from Death Duty alone.

Mr. C. Williams: I pointed out, quite deliberately, cases where some of that money was being used for the purposes I described; but my main argument, which was quite different, was that capital should not at present be taken out of industry, because industry today needs capital.

Mr. Jay: I gather that the hon. Member now agrees with me. In raising these sums from current revenue we are, in fact, following a more prudent and more austere financial policy than most private businesses would normally follow. We are building up physical and productive assets from which posterity will enjoy either real or financial revenue. That is true of housing, schools, factory building by the Government, re-equipment of nationalised industries, and so on. The total of the moneys expended on those objects adds up to very nearly £400 million, and if we include war damage payments as a capital item the total would reach £540 million. This ought always to be remembered when we are speaking of this proportion of 40 per cent. of the national income.
The right hon. Member for Saffron Walden, in arguing that our level of taxation is too high, quoted a remark from his hon. Friend the Member for Chippenham (Mr. Eccles) about the burden of the welfare State falling on the shoulders of the taxpayer. As has been pointed out from this side of the House today, however, the truth is that a large part of


the taxation imposed by the Bill is designed to achieve a transfer of revenue which is raised by taxation on profits, on property and on very high incomes, and is paid out on social services, food subsidies, and so on. Hon. Members opposite, including the hon. Member for Farnham (Mr. Nicholson), who described these taxation levies as a charge on production, have argued today that this amounts to a great burden on industry, raises our export prices, and so impedes our recovery. This is not merely untrue but is, in fact, the precise reverse of the truth.
The food subsidies and other social services made possible by the taxation proposals in the Bill are, in reality, one of the most potent factors in keeping our costs down and, therefore, assisting our production and export trade. My hon. and learned Friend the Member for Northampton (Mr. Paget) stated this argument very lucidly today and it was called in question by the hon. Member for Edgbaston (Sir P. Bennett). In my opinion my hon. and learned Friend was perfectly correct in his main thesis. Surely, hon Members opposite can see that if, for instance, a motor car worker in Coventry is able to buy his food more cheaply than a motor car worker in some overseas country, the Coventry worker, to achieve the same real standard of living, does not have to throw so heavy a burden of wage costs on the motor industry. Similarly, if his children get family allowances, or free meals in school, or a free health service, it is not necessary for him, in order to secure the same real standard of living, to demand an increase in money wages, which would, of course, tend to force up prices abroad.

Mr. Birch: If that argument is valid, how does the hon. Gentleman account for the fact that the costs of prices and wages are going up here and going down elsewhere?

Mr. Jay: It must be obvious to the hon. Member that if it were not for the food subsidies they would have gone up very much further. Apart from my hon. and learned Friend the Member for Northampton, I have hardly ever heard this fundamental point mentioned in public controversy, except by one City editor a few months ago, who pointed out

that, with the sellers' market at its height, food subsidies were keeping export prices down and thereby turning the terms of trade against us. There was some truth in that argument at that time, but the corollary is that now we are in a buyers' market the same subsidies and services enable us to quote lower export prices and so assist us directly and powerfully in our battle for exports.

Viscount Hinchingbrooke: Are we to understand that the Economic Secretary to the Treasury, a responsible spokesman for the Government, accepts fully and now re-states the extraordinary economic doctrine emanating from the hon. and learned Member for Northampton (Mr. Paget)?

Mr. Jay: The argument is only extraordinary to the noble Lord because he has not thought enough about it in the past. The simple reason for what I have said is the well-established economic principle, which has been confirmed both in theory and practice, that taxation of profits does not normally induce a manufacturer to raise his prices. I think it would be agreed that it would be a rare case where prices were raised because profits and Income Tax have to be paid before the shareholder got his dividend. It is surely clear enough that if the same amount were raised by adding to money wages the resulting rise in prices would be quite certain and much greater; and it is even more clear that the payment of Death Duties does not tend to raise industrial prices or export prices, which is one main reason why we have raised the level of Death Duties in this Bill this year in order to finance the social services.
All this is only one way of pointing out the obvious fact that if food subsidies, family allowances, or other social services, financed out of taxation on profits or property, were to be cut, money wages would have to go up. The hon. Member for Edgbaston said that wage earners would not agree to social services being quoted in wage negotiations, but I do not think he would deny that if all the food subsidies were swept away today that would be an argument for putting forward a claim for higher wages.

Sir P. Bennett: At the same time I would tell them that they would not pay 3s. 6d. for a sixpenny packet of cigarettes.

Mr. Jay: It is quite clear that if these services and corresponding taxation of profits were cut down we would not have a fall, but a rise in industrial costs. For that reason, the whole argument advanced today and elsewhere, suggesting that the tax methods necessary to finance food subsidies and other services are an impediment to our export trade is a complete fallacy, born largely of ignorance and prejudice. Precisely the reverse is true. It may be that hon. Members opposite are trying to argue that taxation on the one hand and social services on the other could be cut down without any corresponding increase in money wages. That means, of course, engineering a deliberate reduction in real wages to get out of our present difficulties. If that is what hon. Members opposite really mean, I wish they would have the courage to say so frankly. If that is not what they mean, I wish they would have the honesty to admit that the whole of their argument about taxation and subsidies raising our industrial costs is nothing more than an intellectual fraud.

Mr. Nicholson: Is not the hon. Gentleman guilty of a slight intellectual fraud in selecting items in the welfare State which act as a subsidy or indirect subsidy to production, while ignoring the fact that many of the items of expenditure in the welfare State are new articles, although, no doubt, desirable?

Mr. Jay: My argument is concerned with the general articles which affect the wage earner's household. Are we to solve our present difficulties by thrusting the sacrifices which may have to be made on those who are worse off? It may well be that sacrifices in consumption must be made before we overcome the present dollar shortage which, as I said, is our crucial problem.
The question before us and before the country is how those sacrifices can best be shared. If it is the doctrine and policy of hon. Members opposite that taxation of profits should be reduced at a time when the consumption of the whole community is to be temporarily cut, they are simply proposing that the rich should be given a larger share of a smaller cake. It is because we refuse to accept that solution that we support the Budget and the proposals in this Bill. If the Tory Party really want to proclaim that solution as their remedy for the

present ills, before this House and before the country, we shall very confidently await the verdict.

Mr. Molson: Am I to have any reply at all on the question of savings, on which the industrial recovery of the country depends?

Mr. Jay: It is because we did not expect a large rise in private savings that we decided to continue our policy of a Budget surplus this year. There, again. I think events have borne us out.

Sir William Darling: Does the hon. Gentleman confirm his statement that we are shortly to have temporary cuts for rich and poor alike?

Mr. Jay: I said that it may be that before we have overcome our dollar difficulties there may have to be some cuts in consumption.

Mr. Nicholson: The Socialist paradise.

Sir W. Darling: I do not know if the Debate can be continued, but, having heard the Economic Secretary, I am rather dissatisfied. Here is a country which has gone through two wars, now facing this Finance Bill. We do not appear to recognise that the strength that has enabled us to go through two wars was that we accumulated by savings a considerable and substantial reserve. That does not appear to have emerged from the Debate at all.
The Economic Secretary confirms the opinions which have been expressed elsewhere, that apparently saving is of no great value, nor of much necessity, in this community. My hon. Friend the Member for The High Peak (Mr. Molson) complains that no observations were made about this all-important subject, and it is abundantly clear to me that the foundation of the greatness and strength of our country was in our ability to save. During the 1914–18 war our strength was in our overseas investments and our internal savings. Our strength in the recent war was in those things, too. We have embarked during the last four years on a different principle. Saving is apparently to be done by the State, and the saving that the State has done up to now during the last four years of the initial experiment, has not been very considerable.
I am sorry that circumstances prevent me from developing this view, but I cannot resume my seat without expressing the profound conclusion that this four-year experiment on which we have embarked does not seem to offer us in these difficult and changing circumstances anything like the security which the country enjoyed during the years gone by, and I am gravely dissatisfied with the provisions of this Finance Bill.

Orders of the Day — HOUSE OF COMMONS (INDEMNIFICATION OF CERTAIN MEMBERS) BILL

Order for Second Reading read.

7.32 p.m.

The Attorney-General (Sir Hartley Shawcross): I beg to move, "That the Bill be now read a Second time."
There are perhaps some who would say that this is an unnecessary Bill, that it errs on the side of caution, that no challenge would have been made and no great harm might have been done if we had neglected to introduce it. But we have thought that in matters affecting the constitution of this House and the qualifications of Members who sit here, one must err, if at all, on the side of caution, and that we must be jealous of any infringements, whether in the spirit or merely in the letter, of those laws which are designed to protect the independence of Members of Parliament and to avoid the evils of placemen and so forth.
Unhappily, the precise limits of those laws—and, in the main, they are embodied in Sections 24 and 25 of the Succession to the Crown Act, 1707—are very obscure. There is no precise definition of what is meant by an office of profit. A case where a large salary is payable to the holder of an office is, of course, clear enough, but what of the office where something is paid which in name at least is a subsistence allowance? That is at times a case of great difficulty. On the whole, we have taken the view that where there is any payment or any expectation of payment going in amount beyond the sum which might be regarded, not as a mathematically accurate but as a fair reimbursement or pre-assessment

of the expenses actually incurred through holding that particular office, the payment or expectation of that sum would constitute the office one of profit.
Then again there is the question, also difficult, in relation to new offices, whether they are held "under the Crown" within the meaning of Section 24 of the 1707 Act or whether, in relation to the old offices, they are held "from the Crown." There is room for argument as to whether there is any legal difference in the meaning of these two different phrases. There we have taken the view that to be held under the Crown an office does not necessarily have to be subject to any continuing control in its exercise by the Crown. The words in Section 24 of the 1707 Act, we think, refer comprehensively to any new office connected with the public service or the appointment to which is in the hands of some authority under the Crown. If—which is not certain—the meaning of the words "from the Crown" in Section 25 is a different one—apart from the fact that the Section refers to old offices—the difference may be that they imply an office which has been within the immediate grant of the Crown.
Those are the conclusions about the rather obscure laws in regard to these matters which we think are right. I would never assert with absolute certainty about a branch of the law of this kind, that those conclusions are inevitably right. These are matters which have been discussed a great deal in the past, and other views are held about them, but, giving the best consideration we can to the matter, we think that the view which I have just presented to the House is probably the correct one on the proper construction of the Act.
That being our view as to the construction of this old Statute of 1707, our attention was drawn to the position of certain hon. Members who had been nominated by His Majesty to become members of the General Medical Council. The General Medical Council was set up under a Statute of 1858 which has been amended, in details that I need not now recite, by various subsequent Acts of Parliament, but under its constitution His Majesty, on the advice of the Privy Council, nominates five of the members of the Council and those members hold office for a term not exceeding five years,


although I think they are eligible for reemployment. Provision is also made under the constitution of the council for the payment of fees to the members of the council, and in practice, as I understand, they are in fact paid a sum of five guineas in respect of each attendance. They are paid not out of State funds, not out of moneys provided by Parliament, but out of moneys collected by the medical profession from registration fees, but we do not think that it is a criterion of whether or not an office is an office of profit under or from the Crown that the actual emoluments of it are derived from sources other than public funds.
That being the nature of the office, during the lifetime of the present Parliament two hon. Members of this House were nominated to the council by His Majesty on the advice of the Privy Council. They were, however, by no means the first hon. Members of the House who had been nominated to and sat as members of the General Medical Council. In times past many hon. Members belonging, as a rule, to the party opposite had been nominated to the General Medical Council, and had sat upon it and performed the duties of members of it without it occurring to anybody at all that there might be any possible infringement of the Statute of 1707. This Bill does not provide indemnification for those other Members who in the past have sat as members of the General Medical Council, for the simple reason that any claims to penalties against them should now be statute barred; there seemed, therefore, no reason to include them in the scope of this Bill, and I have no reason to mention them particularly by name.
In the case of the two hon. Members whose names are mentioned in the present Bill, they, being appointed in the lifetime of the present Parliament, are not of course protected by the lapse of time and might, on the view we take, be liable to the possibility that actions would be brought against them. We think there is no doubt that they were appointed to an Office of Profit under the Crown. On the other hand, I think it is right to say, and the House would no doubt wish me to say, and I hope will concur in my saying, that they were appointed and held their office in complete good faith on the basis of many precedents of times gone by.

Indeed, the hon. Member for Attercliffe (Mr. J. Hynd) never acted in the office at all, because immediately after his appointment to the office, just recently in the course of this year and before he had ever taken any part in the proceedings of the General Medical Council, it occurred to him that there might possibly be some question of propriety in holding the office. It was in these circumstances that the matter came to notice and was the subject of consideration.
I hope that, as far as these two hon. Members are concerned, the House will be satisfied that whilst there was a technical infringement of the law relating to this matter, confused and obscure though unfortunately that branch of the law is, no one can really be blamed for having followed the longstanding and numerous precedents, and that whilst the two hon. Members must, of course, vacate these appointments and cannot continue to hold them, they ought not to be penalised for having held them in the past, and that this Bill, as it seeks to do by Clause 1, might properly indemnify them.

Sir Hugh Lucas-Tooth: Before the Attorney-General leaves that point, will he say whether the Bill applies to any future appointments of Members of this House to the General Medical Council?

The Attorney-General: I thought I had made that clear in my remarks. I said that these two Members must vacate this office. We are not seeking to make this office not one of profit. It will remain a disqualification, and these two Members will vacate the office and will be indemnified. We are not proposing to legislate for the future and to say that this will no longer be an office of profit which Members may hold. It is the future policy that no Member shall be qualified to hold the office. We do not think it right to alter the law in a piecemeal way, by providing that this particular office should be excluded from what has hitherto been the law. This is merely a Bill of indemnification in respect of these two Members.
Clause 2 deals with a different case. Under a Statute, also an old one, the House of Commons (Disqualifications) Act, 1782, a Member is disqualified to hold any contract with the public ser-


vice. Here, again, the Act and the law arising from it are obscure in many particulars. It does not, for instance, apply in the ordinary way to Members who are shareholders in or directors of a public company, unless, possibly, they are remunerated in an unusual way out of the actual profits of the particular contract. Moreover, it does not apply to casual or isolated transactions over the counter, so to speak, transactions which are small in amount. By the de minimis non curat lex maxim, a number of cases have not been brought within the strict provisions of the Act.
In the case of the hon. Member for West Islington (Mr. A. Evans), to whom the Bill refers, the transactions went a little further, and here, I think, I might say somewhat nearer the line hitherto drawn between those transactions that need not be bothered about and those which involve an infringement of the Statute. There were 11 transactions altogether extending over a period of 21 months, of a total value of just under £100. What happened was that the Home Office placed an order with a firm in which the hon. Member is a partner, a firm trading under the style of Evans Bros., for a small quantity of labels of some kind. The first order was placed with that firm before the hon. Member had been elected to this House, and it was for a sum of £2 7s. The other orders were in the main for small amounts, although there was one for a comparatively large sum, the whole amounting to £100. After the first order which had been placed with the firm, quite legally because there was then no question of disqualification arising at all, 10 further orders were given to the firm and were given in completely good faith, because of the various firms which had been approached for the supply of these particular labels this one offered the earliest deliveries at competitive prices.
If these transactions had been the subject of a written contract, the position in regard to them would at once have become clear, because written contracts with Government Departments in this connection have a clause in them dealing with this particular point. But, as it was, in these small occasional transactions it was not realised by the Home Office that a Member of this House was a partner,

and the hon. Member himself did not realise that although the Statute does not apply at all to a one-man company it does apply to a many-man partnership, which was how this misapprehension arose. In this case also I would ask the House to say that this is a matter in which no one can or would for a moment wish to impune the good faith of the Department concerned or of the hon. Member, and that it would be proper to indemnify him from the possible consequences of the breach of the Statute.
I want to add only this: I did refer, and the hon. Baronet took me up on the point, to the obscurity and confusion of this branch of the law relating to offices of profit generally. We do not propose by this Bill to alter the law on this matter. The law is obscure and confused, but its amendment, restatement or codification is by no means an easy matter. It would, we think, probably have to be the subject of study by a commission, legal committee, or body of that kind. It would not be easy to find a better formula which would hit at really substantial cases, where Members ought to be disqualified from sitting in the House, while not affecting quite trivial infringements which ought not, in existing circumstances at this time, to affect a Member's right to sit here. We think that that would be a difficult formula to find. Previous Governments, which no doubt have considered this problem, have felt that it was perhaps better to leave matters as they were until an obviously better formula had been found to take the place of the existing law. We have hitherto taken the same view about this matter, but I can add that we are giving the whole subject attention and considering whether there is any more comprehensive way in which the matter can be dealt with. But that, of course, is not the purpose of the Bill, which is designed merely to indemnify the three Members named.

Wing-Commander Hulbert: Will the Attorney-General clarify one point. I think he said, when referring to the case of the hon. Member for West Islington (Mr. A. Evans) that where an hon. Member is a shareholder or a director of a public company he does not come within the scope of the statute. The Attorney-General rather emphasised the word "public." Does it also apply to private companies?

The Attorney-General: I believe I did say "a public company" but I did not attach significance to that. Any incorporated body is deemed in law to have a quite separate existence from the persons composing it. That is the distinction between the company, private or public, and the partner.

7.51 p.m.

Mr. R. A. Butler: It should be made clear on behalf of the Opposition that we regard all these cases of the three hon. Members who are concerned as bona fide cases which it is right for the Government to cover with the least possible delay. That is to say, the hon. Member for Attercliffe (Mr. J. Hynd) and Berwick and Haddington (Mr. J. J. Robertson), as members of the General Medical Council, would seem to us to fall under the mischief of Section 24 of the Succession to the Crown Act, 1707. I have not the great legal knowledge of the Attorney-General, but it would seem to me that the series of precedents which we have discovered, to which the only contradiction is afforded by Pringle's case in 1924, supports the view that the receipt of remuneration by the holder of the office is immaterial provided that his office is one in respect of which remuneration is payable. That is so even when the remuneration is now fictional, as is the case with the Stewardship of the Chiltern Hundreds, for example. In view of the fact that under the rules of the General Medical Council such fees and reasonable travelling expenses can be made payable, there is no doubt that the cases of those two hon. Members ought to be covered by some such Bill as this.
In the case of the hon. Member for West Islington (Mr. A. Evans) there is a greater complication about which one or two of my hon. Friends might perhaps wish to ask some questions in regard to the type of company and the type of contract which is or is not covered by this matter. I do not wish to go into that myself. I am satisfied that the Attorney-General has gone into it thoroughly and that legislation is therefore necessary to cover the case of the hon. Member for West Islington. The sums concerned seem to us to be very small. I am quite certain that there was no intention on the part of the hon. Member to do anything which is illegal or wrong in any way

because we have been informed by the Lord President that the hon. Member himself informed the Government, taking the initiative because something appeared to him to be going wrong.
From my point of view, and I think I can speak for my hon. Friends, there is nothing about which we need, so to speak, make a fuss in regard to the position of these three hon. Members, who, I am sure, will feel themselves adequately covered by this massive Bill, enshrined in which their names will have an immortality to which I hope never to aspire. I wish to refer for a few moments to the position generally. A Select Committee in 1941 made a report which proposed that a Bill to reform the present law in regard to Members receiving payment from the Crown should be amended in certain directions.
The Committee made three main proposals: That, with the exception of not more than 60 ministerial offices, any office from or under the Crown should disqualify any person from election to, or membership of, the Commons. It also stated that certain specified offices whose duties are such as would not substantially interfere with a Member's duty or increase the power of the executive in the Commons, for instance, Regius professors—of whom I am not aware that we have any examples, and which position my hon. Friend the senior Burgess for Cambridge University (Mr. Pickthorn) has not as yet attained—should be declared not to be disqualifying offices. The report also said that certain specified offices, including the Chiltern Hundreds and Manor of Northstead and some others about which doubts have arisen in the past, for example, Recorder of London should be expressly declared to be disqualifying.
The Committee went into the matter with some care, and when the Coatbridge and Springburn Elections (Validation) Act, came up in 1945 my right hon. and learned colleague, who was then Mr. J. S. C. Reid, raised this matter and received a reply from the Attorney-General who, in winding up the discussion said:
We will certainly take into more than sympathetic consideration, as soon as we are able to do so, the report of the Select Committee of 1941, without of course considering ourselves restricted by the terms of that report.
This was four years ago.


We will examine the whole problem. As I indicated in my previous remarks we realise that this is a problem of considerable complexity which may lead hon. Members inadvertently into great difficulty, and it is one in which the position should be clarified as soon as Parliamentary time permits."—[OFFICIAL REPORT, 12th October, 1945; Vol. 414, c. 575.]
Here is the shepherd who has allowed his sheep to go astray through four years of neglect. He was warned by the Coat-bridge and Springburn Elections (Validation) Act, 1945, how his tender sheep might stray from the farm. He promised us that he would take up this matter and give it consideration, using the phrase "as soon as Parliamenary time permits."
Ever since then the greater part of Parliamentary time has in our view been wasted by the proposals of the Government to stifle and hamper our industrial structure in this country. Meanwhile hon. Members have been allowed to stray from the path and have only been brought back, as in the case of the hon. Member for West Islington, by their own moral sense, by appealing to the shepherd themselves. I do not believe that the sheep generally in this excellent institution are so well endowed with knowledge of the law and necessarily with such high moral sense as the hon. Member for West Islington.
I must appeal to the Government once again to give this question of introducing legislation to clear up these complicated and antiquated Acts under which we work their immediate consideration. It really is an intolerable imposition upon hon. Members and upon Parliamentary time that we have to have small Bills of this character and to have hon. Members on any side of the House being in a position where they might at any time be unwittingly contravening the law and have to have a special Bill passed. I make a special appeal to the Government and ask them whether they will now not give the matter consideration and do so urgently, and if necessary postpone the date of the next General Election in order to give the necessary time to it.

7.58 p.m.

Mr. Bing: I think the House would make a mistake if it passed from this matter immediately without considering the need for the further legislation which the right hon. Gentleman

has suggested, because it does not only concern Members on this side of the House. It might be very desirable if, before the General Election, we had some general Measure which would remove all types of doubt not only about the position of Members of this side of the House but of some Members even on the Front Bench opposite.
Before I come to the position of the right hon. Gentleman the Member for Woodford (Mr. Churchill)—there may be some need for further—

Mr. Deputy-Speaker (Major Milner): It is not permissible to discuss the position of any other hon. Member. This Bill is limited in scope to three named hon. Members, and the discussion must relate to those three Members alone.

Mr. Bing: Before deciding what I would say I examined the precedents set by the Coatbridge and Springburn Elections (Validation) Act, and there the principle, which I suggest might be accepted here, was permitted of discussing not only what was in the Bill but what general reforms were necessary. I only intended to illustrate the position by a general reference.
If I may now turn to the position of the three hon. Members concerned, they are the victims of a law which is not only obsolete but which has quite clearly become absurd. It is not only a waste of Parliamentary time to introduce these Measures but it exposes the Members concerned to misrepresentation that they have done something which is in some way improper, and makes them not only open to action here in the House but to action by common informers, and to a type of action in the courts which might set the courts at variance with the House. It might be used at a General Election, when the House is not in existence, to make an attack upon a number of leading candidates.
If I might just deal with the first point, I think the Attorney-General is quite clearly wrong if he suggests that, in order to have an office of profit, it must be some profit consequent on such a position.

The Attorney-General: I never said that and I never thought it, and I referred to a reasonable expectation. Those were my words.

Mr. Bing: If I might refer the Attorney-General to the evidence of Lord Simon in 1941 before the Select Committee, he will see that what Lord Simon called attention to was the case of the paid and unpaid Whips. In those days, an office of profit disqualified a Member, and it was decided that the office which disqualified him was that of the unpaid Whip, and that when a Member from being an unpaid Whip became a paid Whip, in accordance with the Statute, he was not occupying an office of profit. The matter is perhaps a little more complicated than possibly the Attorney-General thought at first sight. The amount of remuneration received by the hon. Member is not really in question. If they had been employed as Ambassadors in Washington, they would have been entitled to the salary of somewhere about £3,500 a year, with £20,000 expenses—that is the rate for the job—but in accordance with precedent, that would not have disqualified them even if they had been absent from the House the whole time. The whole position has now reached something approaching confusion.
Indeed, hon. Members may be disqualified by a number of statutes, and there are some 150 of these which are capable of being invoked to disqualify a Member. Secondly, Members are disqualified if they get any new office of profit under the Crown, that is to say, any offices of profit which have been constituted since 1707 and held under the Crown. What is the meaning of "new offices," and what is the meaning of "under the Crown"? It is so obscure that the House really ought to take steps to have the whole matter cleared up. If I might give an example, in 1932 it was suddenly discovered that, as a result of some valuable reforms which had been introduced concerning the President of the Board of Trade by the right hon. Gentleman the Member for Woodford when he held that office, since 1909 this had become a new office not "from the Crown," but "under the Crown," and it therefore was an impropriety for every President of the Board of Trade from 1909 to 1932 to sit in this House.
If we come to the case of contracts with the Crown, that is equally absurd and equally ridiculous. If one looks into Parliamentary history, one sees that legis-

lation was originally introduced to prevent any mushroom firms with which hon. Members might be associated from securing contracts in the war which was then unhappily raging against our American Colonies. Very properly, old firms were exempt, but, as the date has never been altered, the law still provides that a firm was not a mushroom firm only if it consisted of ten persons on the 1st January, 1782, or since the 20th June, 1802, in regard to Ireland. This illustrates that the whole position is completely absurd.
If one reads the Report of the 1941 Select Committee one finds the Chairman's remarks on the unhappy case of a very respectable Member of the House who was horrified to find that Westminster Hall was being repaired with timber from his estate, and who came to the conclusion that he would be disqualified as a Member in consequence of that fact. On investigation, however, he found that his estate had been turned into a limited company, of which he was the sole director and therefore he was entirely exempt.
In those circumstances, the position is really absurd, and, indeed the whole contract position raises very difficult questions, because it was discovered that hon. Members were entering into a large number of contracts with the Postmaster-General for the provision of telephones. Because they were under contract with the Postmaster-General it was necessary in 1931 to pass an Act to relieve hon. Members of their liability to disqualification which had been incurred by the fact that they had got telephones from the Crown. So we now have the case of the unhappy hon. Member for West Islington (Mr. A. Evans) because he was dealing as an unincorporated company and is liable by these transactions. But let us suppose that as a lawyer he was interested in a packet of stationery concerning which there was a prosecution. It would be quite possible, without any impropriety in it at all, for the Home Office to employ an hon. Member of this House as counsel dealing with that matter. When we get to the intermediate position, the matter is much more difficult, and it is still undecided for example, if a scientist is employed to examine the packet of stationery to see if it is up to sample, whether he would be disqualified. That is still an unresolved question.
This matter really does require looking into, and I think my right hon. and learned Friend is wrong when he says that the only cases we should look at are those of offices of profit. There are other disqualifications equally undesirable which ought to be included in this Bill. Alternatively, the House should not allow this Bill to pass until we have had some indication that these other matters will be included in another Bill. If we allow this Bill to pass without dealing with these other matters, we shall be avoiding an opportunity to put right what might go wrong at an election.
There is one other aspect of the matter to which I should like to refer for a moment. When we are dealing with the disqualification of clergymen we find an extraordinary position.

Mr. Deputy-Speaker: The hon. Gentleman really cannot extend this matter beyond Members of Parliament. This Bill refers to three specific Members of Parliament, and the hon. Gentleman must really relate his remarks to the cases covered by the Bill.

Mr. Bing: In the case of the Coat-bridge and Springburn Validation Bill, the whole question was to validate the election of the hon. Member for Coat-bridge (Mrs. Mann) and the hon. Member for Springburn (Mr. Forman), and the whole Debate on that occasion ranged around—

Mr. Deputy-Speaker: That may be, but we are not debating the Coatbridge and Springburn matter. We are debating the question of indemnifying the three hon. Members whose names are set out in the Bill.

Mr. Bing: I am attempting, and I hope it is in Order on the Second Reading, to criticise what is not in this Measure. Surely on this Bill on its Second Reading, one is entitled to criticise what has not been put in it? Surely, one is entitled to say that there ought to be further Clauses in this Measure, and, quite clearly, it is within the scope of this Measure to deal with other features of disqualification?

Mr. Deputy-Speaker: The Ruling of Mr. Speaker is to the contrary—that the discussion of other matters beyond the

three hon. Members named would not be in Order. In my view, the hon. Gentleman would be perfectly in Order in offering general observations, and that is as far as he can go.

Mr. Bing: I do not want to prolong the matter, but I would like to put this point. If we allow this opportunity for discussion of the matter to pass, we may find that at a General Election there are a number of candidates who would be disqualified, and this House will be dissolved and we shall not be in a position to deal with the matter. The argument I am trying to put is that, in those circumstances, either this Bill should include those other matters, or, if we agree to this Bill going through as it is, we should have some promise that some other Measure will be brought forward which deals with these very important points of disqualification.
The point I am trying to put here, for example, in regard to the position of the clergy, is that they are all disqualified and disqualified under different decrees, from being candidates. For instance, a clergyman of the Church of England may not sit, but may divest himself of his orders and may then be elected. A clergyman of the Church in Wales can be elected, but if he takes orders while sitting as a Member, he is immediately disqualified, though he may stand again for re-election. So far as the Church of Ireland is concerned, there is a complete and absolute disqualification, and as hon. Members opposite have a candidate who is a member of the Church of Ireland, I thought it would be desirable before the General Election that there should be some opportunity of presenting them with the position in which their candidate could go forward to the polls. That was the only point I was trying to make.
It really is a very complicated and difficult question, and there are so many anomalies that it is hard to give examples without straining the patience of the House too much. The law, however harsh it is to the Irish clergy, is particularly tender to the Irish bankrupt, because, while, under the existing law, a bankrupt in England and Scotland may not be a Member of this House, there is no disqualification whatever on an Irish bankrupt. It is fair to say that any Irish hon.


Member who is foolish enough not to become a bankrupt before he enters this House, but becomes a bankrupt immediately afterwards is dealt with straight away by suspension, while in the English case the matter is held in abeyance for six months.
I am sorry that the noble Lord the hon. Member for Horsham (Earl Winterton) is not here because there is a serious disqualification of the Irish Peer, who is not permitted by statute to sit for any university in the United Kingdom. Whatever else we may think, and whatever may have been the original reason for it, there is obviously now no need for such discrimination, and, indeed, the noble Lord and the hon. Gentleman the Senior Burgess for Cambridge University (Mr. Pickthorn) would be easily interchangeable. If, therefore, it is to be one of the principles of the party opposite that they will restore the university representation, it is a little hard that this House should deprive them of the possibility of what might be their most attractive type of candidate. My right hon. and learned Friend mentioned other offices where we are up against exactly the same difficulty. I will not specify or deal with them; I will merely say that these anomalies exist throughout the whole sphere. If I were allowed to develop my case, I could show how exactly the same arguments put forward by my right hon. and learned Friend would apply to the Lord Warden of the Cinque Ports.

Mr. Deputy-Speaker: The hon. Member is referring to another right hon. Member of this House, and, in my view, is going far beyond the confines of this Bill. This Bill, both in its Title and content, refers to the indemnification of three specific hon. Members, and the hon. Member must confine his personal remarks to their cases. I have given him a good deal of latitude.

Mr. Bing: I gave the hon. Member some notice of this point because it is obviously of some importance owing to the common informer procedure under the Act of 1707. If, for example, an hon. Member has sat in this House, has voted, and is disqualified, he is liable to a penalty, as are the hon. Members whom we are now absolving, of £500 a day for every day he sits and votes. Imagine the position of an hon. Member who has sat

for 200 days; he would be liable to a penalty, owing to the action of a common informer, of £100,000. It is desirable that we should relieve people of the possibility of actions of this sort.
I am not going any further than merely to say that this Bill does not go far enough. It seems to me that in the past these Measures have, perhaps, been rather too much of a party nature. Up to now, we have always introduced Measures dealing with Members on our side of the House, but hon. Members Opposite are in an equal difficulty. We might have difficulty in the General Election because there might be actions to restrain returning officers from returning the names of possible candidates as candidates. Therefore, it would be better, here and now, to try to clear up the whole set of anomalies because one never knows when some action will fall within the Statute and when it will not.
I should be willing to argue that none of these hon. Members have fallen within the statute at all, and in regard to the first two, I think the case is very strongly arguable. I will not take up the time of the House any longer because we are about to pass the Bill, but I should like to ask my right hon. and learned Friend the Solicitor-General, who I understand is going to reply, if he cannot give a definite undertaking to do something to clear up these anomalies which, though we know they exist, we have difficulty in debating or raising in this House.

Motion made, and Question proposed, "That the Bill be committed to a Committee of the whole House for Today."—[Mr. Collindridge.]

8.16 p.m.

Mr. Sydney Silverman: On a point of Order. If we are to take the Committee stage now, Mr. Deputy-Speaker, will it be in Order to move manuscript Amendments if they are within the scope of the Bill so as to cover any points such as those which have been raised by my hon. Friend the Member for Hornchurch (Mr. Bing), because, if there is to be no interval in which to put them down on the Order Paper, it would seem only reasonable that some indulgence should be given to manuscript Amendments.

Mr. Deputy-Speaker: That is a matter for the Chairman of the Committee. No one, of course, can prevent hon. Members from putting forward manuscript Amendments, but as to whether they would be accepted or not, I cannot, of course, give any assurance.

Mr. Silverman: May I then ask my right hon. and learned Friend before we take the vote whether he does not think it might be convenient not to proceed further in view of the very important points raised by my hon. Friend in order to give the House and the Government an opportunity of considering them. Obviously, if there is anything in them, it might be a very good plan to deal with all similar cases together in one Bill rather than be faced with the necessity at some time or other of introducing a separate Bill in each separate case as research and investigation bring it to light.

The Attorney-General: I can assure my hon. Friend and the hon. Member for Hornchurch (Mr. Bing) that we shall give grave consideration to the points he has raised and consider whether any further legislation is required in regard to individual Members who are at present Members of this House. I do not think it would be right to attempt to deal with them tonight in isolation, and it may be—I cannot anticipate it, of course—that the Chairman of the Committee would rule that the introduction of any Amendments dealing with other hon. Members was outside the scope of this Bill. But we shall certainly give serious consideration to the points raised by the hon. Member for Hornchurch and emphasised by my hon. Friend the Member for Nelson and Colne, and, indeed, to the general question of the whole of this branch of the law.

Bill immediately considered in Committee.

Bill reported, without Amendment; read the Third time and passed.

Orders of the Day — U.S.A. VETERANS' PENSIONS (ADMINISTRATION) BILL [Lords]

Considered in Committee; reported without Amendment; read the Third time, and passed

Orders of the Day — WIRELESS TELEGRAPHY BILL

Lords Amendments considered.

Clause 2.—(FEES AND CHARGES FOR WIRELESS TELEGRAPHY LICENCES.)

Lords Amendment: In page 3, leave out lines 21 and 22.

8.22 p.m.

The Assistant Postmaster-General (Mr. Hobson): I beg to move, "That this House doth agree with the Lords in the said Amendment."
As the Bill left the Commons for the other place the position was that the authority responsible for the issuing of licences for the blind was the Common Council for the City of London. The position now is that the National Assistance Board is responsible and they have instructed the London County Council for the issuing of the licences. This Amendment is to alter the Bill to cover that point.

Mr. Grimston: I take it that the Common Council for the City of London have agreed?

Mr. Hobson: Yes.

Clause 9.—(ADVISORY COMMITTEE AND APPEAL TRIBUNAL.)

Lords Amendment: In page 8, line 28, at end, insert:
and the Postmaster-General and the President of the Institution of Electrical Engineers shall each exercise his powers under this subsection in such manner as to secure that the committee or the panel, as the case may be, is in his opinion sufficiently representative of persons whose interests are likely to be affected as aforesaid.

The Postmaster-General (Mr. Wilfred Paling): I beg to move, "That this House doth agree with the Lords in the said Amendment."
The wording of the Bill as passed by this House was such as to leave it possible for the advisory committee and, indeed, the panel from which the committee should be drawn, to be composed entirely of persons who possessed expert knowledge. The question was raised at the time by right hon. and hon. Members opposite, who suggested that the committee ought to include persons whose interests were affected. This Amendment is designed to give expression to that.

Lords Amendment: In page 9, line 18, leave out "Provided that if the parties to any particular case" and insert:
(4) If, within such time, if any, as may be limited in that behalf by the rules regulating the procedure of the appeal tribunal, the parties to any particular case before the tribunal.

Mr. Paling: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment concerns procedure. The rules which this Amendment will allow to be made will obviate the expense which might arise if, in the absence of such rules, one of the parties were unduly late in requesting the appointment of specially qualified assessors. This rule gives a time limit in which these parties can make the appeal.

Lords Amendment: In line 32, at end insert:
(5) If, in the case of any reference or application to the appeal tribunal under section eleven of this Act, any of the parties or the president of the tribunal, within such time, if any, as may be limited in that behalf by the rules regulating the procedure of the tribunal, request the Lord Chancellor, if the proceedings are in England and Wales, or the Secretary of State, if the proceedings are in Scotland or Northern Ireland, to appoint two additional members of the tribunal to act for that case, the Lord Chancellor or Secretary of State, as the case may be, shall select and appoint two persons, who need not possess any legal qualifications or expert knowledge, to act as additional members of the tribunal for that case, and the additional members so appointed shall act therefor accordingly in addition to the president and the assessors or assessor.

Mr. Hobson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
In regard to the tribunal, the position in the first instance was that it comprised one legal man and two assessors, and the decision was left solely to the person who was appointed by the Lord Chancellor, namely, the legal person. Criticism was levelled on the grounds that this was open to the charge of being a one-man show and, therefore, in order to obviate that, it is proposed now that these tribunals should consist of one legal person and four members, two of the members to act as jury.

Lords Amendment: In page 10, line 32, at end insert—
Provided that nothing in this section shall render a person liable to incur any expenditure for the purpose of complying with any requirement in excess of one florin in respect of each one apparatus in his possession which is made or adapted for use for ordinary domestic purposes and is used by him for those purposes in his household and is in reasonable repair and running order.

Mr. Paling: I beg to move, "That this House doth disagree with the Lords in the said Amendment."
The Clause of the Bill into which the Amendment was imported by the House of Lords is the Clause which empowers the Postmaster-General, after consultation with the advisory committee, to make regulations prescribing the requirements to be complied with for the purpose of avoiding undue interference. It is manifestly impossible that regulations of a highly technical character, laying down requirements with the object of avoiding undue interference, could be framed on the footing that they will secure that certain people using certain apparatus for household purposes only should not have to meet the cost of complying with the requirements if the cost exceeded one florin. This Clause deals with the making of regulations. It would be quite anomalous for the framers of the regulations, in addition to making regulations for the purpose of dealing with undue interference, to have to introduce a provision restricting the possible payment to one florin in certain cases. It is clearly absurd in this particular instance, and for that reason the Amendment is absolutely unworkable.
8.30 p.m.
If the Amendment had been framed in a better understanding of the Bill it would, no doubt, have figured in Clause 11. That is the enforcement Clause. Then the objective would have appeared to have been, to prevent the Postmaster-General from serving an effective enforcement notice even when interference of a really serious character was taking place, if the cost of removing interference would exceed one florin in respect of a piece of domestic apparatus. That would take outside the Bill the bulk of domestic apparatus in reasonable working order. It may be described as coming very close to a wrecking Amendment.


This is based on no principle, but on an arbitrary cost figure. The Amendment seems to pay no attention whatever to the hardships of the listener subjected to constant interference, nor does it even concede the possibility—though in this case it is rather remote—that interference with the safety of life may be involved.
As hon. Members opposite know, the basis of all this business is voluntary co-operation. If an Amendment like this were to succeed it would take outside the Bill the bulk of domestic apparatus that might be causing interference, and would be likely to break the amount of co-operation which has been a rather good factor in the situation up to the present time, and it would help, if anybody, the people who were most difficult. There is a Lords Amendment we shall consider later which gives another safeguard to people, that if they go to the tribunal to appeal, and if the cost to them of removing interference would create hardship, the tribunal can take that into consideration at the same time as it is discussing the undue interference.

Mr. Grimston: The Postmaster-General does not seem to like this Amendment, but, if I may disagree with him, a matter of some principle is involved here. The whole House showed some concern upon the point that underlies this Amendment when the Bill was going through this House originally. The position then was, and is now, with some modification, that anybody may purchase a piece of apparatus quite legally and properly and then find that, because it is causing interference, he may have to spend money upon it if he is to be allowed to continue to use it. I think the whole House was somewhat concerned about that, and during the discussions on the Bill the point was made—and accepted by the Postmaster-General—that something should be done at the manufacturing end. Moreover, Amendments were introduced.
The purpose of this Lords Amendment—I am not talking about the actual 2s.—is to put some ceiling upon what an ordinary housewife, for instance, using domestic apparatus may be called upon to pay to make her instrument free of interference. I think that, in principle, it is right that there should be some limit

of that sort. Whether 2s. is the right limit is another matter, but without this Amendment there is no limit. There is some safeguard, as the Postmaster-General has said, on the hardship question. Nevertheless, here is an attempt to put a ceiling upon what an ordinary domestic user may be called upon to pay extra on an apparatus which he or she has already legally purchased before he or she can continue to us it. I also think that if this provision were in the Bill there would be more of an urge on the Postmaster-General to get the manufactures to do something to attack the problem at their end, which is what the House was anxious that he should do. Difficult as the matter was, the House insisted upon its being approached from that angle.
Altogether, I do not think that the Postmaster-General has come down very heavily against this Amendment. I do not know how far I am allowed to refer to what happened in another place, but an offer was there made that a limit of some such amount might be accepted if this particular amount was unreasonable. However, if the Postmaster-General does what the House wants, and attacks the problem from the manufacturing end, the thing will solve itself in the process of time. It is only a transitory provision, and one hopes that much of it will not have to be used. The problem, if tackled properly with the powers the right hon. Gentleman now has, will solve itself. For those reasons my hon. Friends and I feel very much inclined to press for the insertion of this provision, in order to give the housewife protection against any disproportionate charge consequent upon using a domestic utensil which she has bought legally, and which she is entitled to use.

Sir Ian Fraser: The Postmaster-General says that 2s. is an arbitrary figure. No doubt it is; it may well be that the figure should be 3s. or 5s. to cover the majority of cases. But if my memory serves me aright, he himself, when questioned about this on Second Reading, told the House that it could be done for 1s. 6d. or 2s.; he said that a very modest charge would be imposed upon the ordinary user of domestic electrical apparatus. I do not think people appreciate fully what will be the result of this Measure. This Bill will threaten every domestic user with an extra charge of a few shillings on ordinary household


electrical apparatus; it will impose an extra charge upon many thousands of housewives who have bought electrical apparatus for ironing, for heating water, or for drying clothes. A housewife will not know whether the apparatus interferes with her neighbour. At any time, subject to these regulations, investigation may be made, and she may be compelled, under pain of penalties, to buy an additional piece of apparatus and have it fitted to the instrument she uses in her home.
This is a serious interference with people's liberty. In addition, it imposes an extra charge on many people. A florin, although a small amount, may be as much as 10 per cent. of the value of the apparatus to which the appliance it buys has to be fitted. A threat to add 10 per cent., or even only 5 per cent., to the cost of a piece of ordinary household electrical apparatus is not lightly to be thought of. It seems to me that since the purpose of getting rid of the interference is to enable television viewers to see the picture more clearly, and since they are, therefore, those who will enjoy any benefit of this, it should be they who pay for this. They ought to pay an extra shilling or half-a-crown on their licences to provide a fund out of which to compensate the housewife for the extra charge that is being put upon her.
This Lords Amendment applies solely to domestic apparatus, so I presume that apparatus used by, for example, physiotherapists will be covered at a later stage, and I shall not now address myself to that question. I do think that, on its merits, some limitation of this kind ought to be in the Bill. I discerned in the Minister's objection a hint that if this Amendment had been proposed to a later Clause he might have accepted it.

Mr. Hobson: Mr. Hobson indicated dissent.

Sir I. Fraser: I thought the right hon. Gentleman said that it would have been better if it had been included in a later Clause. If he would indicate what he has in mind it might affect our attitude to this Amendment. So far as this particular matter is concerned, we ought to protest strongly against the Postmaster-General's proposal to reject the Lords Amendment.

Mr. Cobb: The Postmaster-General, in opposing the Lord Amendment, said that if it were carried it would, in effect, wreck the Bill, and that is undoubtedly the case, as anyone knows who understands this kind of problem from the practical point of view. In listening to the previous Debates, it seemed to me that the House generally was agreed that we could not allow domestic apparatus, which interfered severely with radio navigation, whether for ships or aircraft, to interfere with safety of life. If this Amendment were carried, it would interfere with the Postmaster-General's efforts to see that this interference did not occur. No limitation in money can be put on it, because no one can say what the cost of eliminating the interference in any given case would be. Therefore, I say that my right hon. Friend could not permit any financial limitation.
I should like to deal briefly with the point made by the Opposition, that manufacturers ought to bear the cost of making alterations of this description. It will be remembered that on the Second Reading of the Bill I went into this from the point of view of the manufacturers, and I should like to put it to the House again. The difference, as a rule, in the case of electrical apparatus, between manufacturing cost and the price paid by the public is somewhere in the region of three to one. Therefore, if it costs 2s. at the manufacturing stage to make this alteration, it would be somewhere in the region of 6s. extra to the public. A million irons might be made, but only 1 per cent. of them would cause any interference. Surely it is far better for the 1 per cent. to be ordered to meet this extra cost, even though it may be 7s., than to have an alteration made in every piece of apparatus sold to the public. This seems to be ordinary common sense from the manufacturers' and users' point of view. I would oppose the proposition that the manufacturers should pay.
In any case, it is not a logical suggestion, because, if the apparatus which creates interference is sold by the manufacturer, then the laws of private enterprise start to operate, and the public stop buying the apparatus which causes the interference. They would buy a competing apparatus, which has some kind of an eliminator fixed to it. This is one occasion on which the laws of private


enterprise should operate; hon. Members opposite must be impressed by such an appeal as that.

Mr. William Shepherd: It is very interesting to listen to the hon. Member for Elland (Mr. Cobb) asking for the free play of private enterprise in the sphere of industrial activity, with which he himself is connected. I have no doubt that the steel industry would be accorded entirely different treatment, but here the hon. Gentleman wants to see the full play of private enterprise. He says that if people buy instruments which cause interference they will have to pay a substantial sum to have it corrected and will cease to buy that piece of apparatus. That does not stop a person from buying the thing in the first place. It does not deal with the issue of millions of people who have purchased electrical appliances of various kinds, who have used them legally for many years and who are entitled to some consideration. At the time they purchased that apparatus it was quite legal for them to use it in the manner in which they were employing it. We are in a very strong position to resist what the Postmaster-General said this afternoon.

Mr. Cobb: What about the safety of life?

Mr. Shepherd: The hon. Member knows there are methods of dealing with it, and that it does not mean that we have to inflict this burden upon housewives. The hon. Gentleman very kindly cut all the ground away from under the Postmaster-General's feet when he said that no one could say what the cost would be. The Postmaster-General refused to put any ceiling on this cost, but now the hon. Gentleman has said that it might amount to anything. We are, therefore, asking housewives to bear a charge which cannot yet be determined, and which may be considerably beyond their means.

Mr. Cobb: Can the hon. Gentleman say what other means are available to prevent domestic apparatus from interfering with radio safety aids?

Mr. Shepherd: It does not necessarily mean that because it is the desire of the House to see that safety appliances

are not interfered with we should place an indefinite burden upon housewives. There are other means by which the object can be achieved. [HON. MEMBERS: "What are they?"] I would ask hon. Gentlemen not to be so impetuous; I will come to that point in good time. Let me remind the House that we have taken the Postmaster-General a long way on this Bill. When he first brought it in, he had a very big stick with which to beat housewives. We have made this stick smaller and smaller. We have forced manufacturers to do something; we have limited the severity of the penalties which can be inflicted on those who will not obey; we have made the position of the housewife much more tolerable. Tonight, we want to make it more tolerable still, and there is a way by which it can be done.
My hon. Friend the Member for Lonsdale (Sir Ian Fraser) very properly said that a considerable amount of money might be involved in the correcting of apparatus. As he said, that is being asked for to provide safety for navigational aids and, secondly, to prevent undue interference with television. People have bought apparatus when they were perfectly entitled to buy it and to use it. If something else has since come along to upset that position, it should be the duty of the State to pay any charge above a certain maximum of cost necessary for the correction of the apparatus. The Post Office ought to bear that charge, or it could charge a bit more to television users. At any rate, let us not inflict upon the housewives a burden which they are not capable of bearing and ought not to bear. I hope that we shall have no hesitation in deciding against the view expressed by the Postmaster-General. It is essential to get justice for housewives, even from a Socialist Government.

8.45 p.m.

Mr. Hobson: It seems to be the general impression that interference from domestic apparatus affects only television sets. That is far from being the case. Where there is an escape of electro-magnetic energy there can be interference with wireless sets, which is the most common form of interference. I recollect that during the earlier stages of the Bill the hon. Member for Westbury (Mr. Grimston) said categorically, and without any equivocation whatsoever, that if


safety of life at sea was concerned, he would agree to anything. The position is that if we agree to this Lords Amendment it means that interference from domestic apparatus can jeopardise safety equipment for the landing of aircraft or in connection with navigation.

Sir I. Fraser: Can the hon. Gentleman put his hand on his heart and affirm that the emission of electro-magnetic energy from an apparatus such as the thermostat in a domestic iron could interfere with powerful navigational aids? Even the Postmaster-General did not go so far, and he half swallowed the words when he said that it might do so a little.

Mr. Hobson: If there was a lot of domestic apparatus in the region of a dock or harbour—Merseyside is a good example to take—and there was an emission of electro-magnetic energy from that apparatus, it might be at the same frequency at which the safety devices were working.

Sir I. Fraser: Nonsense.

Mr. Hobson: That may be the opinion of the hon. Member, but, with all due respect to him, I would prefer the advice of the experts on this matter.

Sir I. Fraser: If the hon. Gentleman will read his brief, he will see that that is so.

Mr. Hobson: This is not in the nature of a tax. The Opposition have forgotten that in most cases the housewife herself is a listener. They have failed to realise that the majority of people—when it is brought to their notice that their apparatus is causing interference—do everything they can to eliminate the interference. Why, then, should we agree with this Amendment, which would penalise the good citizen?

Mr. W. Shepherd: Why should it?

Mr. Hobson: That is as I see it. There is a further point, and I will give a specific case with regard to the amount of a florin. It is quite common to find faulty wiring in a house. Interference may be caused to someone's wireless set, and the Post Office engineers may find that it is due to faulty wiring. Do the Opposition say that the

Post Office should pay the whole cost of rewiring that house in order to satisfy the housewife? Regulations are made with regard to interference, and they are laid before the House and may be prayed against. They are not brought forward unless they have been approved by a panel of eminent engineers. I do not see why we should be saddled with an Amendment whereby the cost of removing interference should be limited to the sum of 2s.

Mr. Grimston: There is nothing in the Amendment to prevent the Postmaster-General acting in the case of safety. All that would be necessary would be that any cost above 2s. would have to be met by him.

Air-Commodore Harvey: In order to substantiate his argument, will the hon. Gentleman say what interference with navigational aids has been experienced at London Airport or even Northolt?

Mr. W. R. Williams: Can the hon. and gallant Gentleman the Member for Macclesfield (Air-Commodore Harvey) give the answer to that question?

Mr. Hobson: Are we to wait until an accident occurs and it is found that the cause was domestic apparatus emitting electro-magnetic energy? Is that what the hon. and gallant Gentleman wants?

Air-Commodore Harvey: There has been no interference.

Mr. Erroll: I think the reply of the Assistant Postmaster-General has been most unsatisfactory. He used the emotional argument of danger to aircraft and to navigation in confined waters as an excuse for introducing a wide measure of control and supervision over the householder. It is obvious that if there is any question of safety to aircraft or ships such powers would be granted to him willingly, but he is not asking for those powers for these specific cases, but to apply his restrictive activities generally.
I ask him if his engineering experts, whom he has been frequently calling in aid of his argument, have been able to quote him any example where interfer-


ence from domestic apparatus could interfere with port radar of the type he has in mind at Liverpool? Would he, in that case, indicate the frequency of electromagnetic radiation which would cause such interference? If he knows, perhaps he will tell us? I suggest that he does not know. He has been glad to accept this advice from the people he is pleased to call his experts or, perhaps he is pleased to misread it whenever it suits his purpose.

Mr. Cobb: I assure the hon. Member that if he would go to Dollis Hill he would find it amply demonstrated that if radiation occurs on the same wave length as that used by the radar installation at Liverpool, interference with life-saving apparatus must take place.

Mr. Erroll: I would be quite prepared to go to Dollis Hill at any time, but at the moment it is the duty of the Minister to come to this House and to explain to us what we might otherwise see at Dollis Hill. It is no answer to say that if we want to see it we can go to Dollis Hill; it is the task of the Minister to bring the arguments about Dollis Hill to the Despatch Box, and he has so far failed to do so.
Now perhaps I may be allowed to continue with my next point. The Minister suggested that if Post Office engineers found radiation was caused by faulty wiring in a house we should not expect the

Post Office to pay for the cost of rewiring. Of course we should not, but that is in quite a different category. If the wiring is faulty there is an obligation on the householder to put it right, and it is the duty of the supply authority to see that he does. There is no question at all of the Post Office or of anyone but the householder having to put that right. In the same way, if the police find a motor car in a faulty mechanical condition on the road, the onus is quite clearly on the owner of the motor car to make good the faults in it.

We are concerned with the householder who has a properly functioning piece of domestic apparatus and who may find that as a result of the Bill being passed without this Amendment he is called upon to go to considerable expense at the instigation of an inspecting engineer. We object very much to this being imposed upon the householder, particularly in view of the flimsy supporting evidence so far brought for the examination of this House.

Mr. George Jeger: is the hon. Member in favour of any house, holder with electrical domestic apparatus being allowed to be a nuisance to the radio sets of all his neighbours?

Question put, "That this House doth disagree with the Lords in the said Amendment."

The House divided: Ayes, 232; Noes, 78.

Division No. 208.]
AYES
[9.0 p.m.


Acland, Sir Richard
Brown, T. J. (Ince)
Ede, Rt. Hon. J. C.


Albu, A. H.
Burke, W. A.
Edwards, W. J. (Whitechapel)


Allen, A. C. (Bosworth)
Butler, H. W. (Hackney, S.)
Evans, S. N. (Wednesbury)


Allen, Scholefield (Crewe)
Carmichael, James
Ewart, R.


Alpass, J. H.
Champion, A. J.
Fairhurst, F.


Austin, H. Lewis
Chetwynd, G. R.
Farthing, W. J.


Awbery, S. S.
Cobb, F. A.
Field, Capt. W. J.


Ayles, W. H.
Cocks, F. S.
Follick, M.


Bacon, Miss A.
Coldrick, W.
Foot, M. M.


Balfour, A.
Collick, P.
Forman, J. C.


Barstow, P. G.
Collindridge, F.
Fraser, T. (Hamilton)


Barton, C.
Collins, V. J.
Gaitskell, Rt. Hon H. T. N.


Battley, J. R.
Colman, Miss G. M.
Ganley, Mrs. C. S.


Bechervaise, A. E.
Cook, T. F.
Gibson, C. W.


Benson, G.
Cooper, G.
Gilzean, A.


Berry, H.
Corbet, Mrs. F. K. (Camb'well, N. W.)
Glanville, J. E. (Consett)


Bing, G. H. C.
Crossman, R. H. S.
Gooch, E. G.


Binns, J.
Cullen, Mrs.
Goodrich, H. E.


Blenkinsop, A.
Daggar, G.
Gordon-Walker, P. C.


Blyton, W. R.
Davies, Edward (Burslem)
Greenwood, A. W. J. (Heywood)


Boardman, H.
Davies, Haydn (St. Pancras, S. W.)
Grenfell, D. R.


Bowden, Fig. Offr. H. W.
Davies, S. O. (Merthyr)
Grey, C. F.


Braddock, Mrs. E. M. (L'pl. Exch'ge)
Deer, G.
Grierson, E.


Bramall, E. A.
Delargy, H. J.
Griffiths, D. (Rother Valley)


Brook, D. (Halifax)
Diamond, J.
Griffiths, Rt. Hon. J. (Llanelly)


Brooks, T. J. (Rothwell)
Debbie, W.
Griffiths, W. D. (Moss Side)


Broughton, Dr. A. D. D.
Donovan, T.
Guy, W. H.


Brown, George (Belper)
Dumpleton, C. W.
Haire, John E. (Wycombe)




Hamilton, Lieut.-Col. R.
Messer, F.
Shurmer, P.


Hannan, W. (Maryhill)
Middleton, Mrs. L.
Silverman, J. (Erdington)


Hardy, E. A.
Millington, Wing-Comdr. E. R.
Simmons, C. J.


Harrison, J.
Mitchison, G. R.
Skeffington, A. M.


Hastings, Dr. Somerville
Moody, A. S.
Skinnard, F. W.


Henderson, Joseph (Ardwick)
Morley, R.
Smith, C. (Colchester)


Herbison, Miss M.
Morris, P. (Swansea, W.)
Smith, Ellis (Stoke)


Hewitson, Capt. M.
Morrison, Rt. Hon. H. (Lewisham, E.)
Smith, S. H. (Hull, S. W.)


Hobson, C. R.
Mort, D. L.
Sorensen, R. W.


Holman, P.
Moyle, A.
Soskice, Rt. Hon. Sir Frank


Holmes, H. E. (Hemsworth)
Nally, W.
Sparks, J. A.


Horabin, T. L.
Naylor, T. E.
Steele, T.


Houghton, A. L. N. D.
Neal, H. (Claycross)
Stross, Dr. B.


Hoy, J.
Nichol, Mrs. M. E. (Bradford, N.)
Stubbs, A. E.


Hudson, J. H. (Ealing, W.)
Nicholls, H. R. (Stratford)
Sylvester, G. O.


Hughes, Hector (Aberdeen, N.)
Noel-Buxton, Lady
Symonds, A. L.


Hynd, H. (Hackney, C.)
Oldfield, W. H.
Taylor, R. J. (Morpeth)


Isaacs, Rt. Hon. G. A.
Paget, R. T.
Thomas, D. E. (Aberdare)


Janner, B.
Paling, Rt. Hon. Wilfred (Wentworth)
Thomas, I. O. (Wrekin)


Jeger, G. (Winchester)
Paling, Will T. (Dewsbury)
Thorneycroft, Harry (Clayton)


Jenkins, R. H.
Palmer, A. M. F.
Thurtle, Ernest


John, W.
Pargiter, G. A.
Titterington, M. F.


Jones, D. T. (Hartlepool)
Parkin, B. T.
Tolley, L.


Jones, Elwyn (Plaistow)
Paton, Mrs. F. (Rushcliffe)
Vernon, Maj. W. F.


Jones, P. Asterley (Hitchin)
Paton, J. (Norwich)
Viant, S. P.


Keenan, W.
Pearson, A.
Walkden, E.


Kenyon, C.
Peart, T. F.
Warbey, W. N.


Kinley, J.
Platts-Mills, J. F. F.
Watson, W. M.


Lang, G.
Porter, E. (Warrington)
Webb, M. (Bradford, C.)


Lavers, S.
Porter, G. (Leeds)
Wells, W. T. (Walsall)


Lewis, T. (Southampton)
Price, M. Philips
West, D. G.


Lindgren, G. S.
Proctor, W. T.
Wheatley, Rt. Hon. John (Edinb'gh, E.)


Logan, D. G.
Pryde, D. J.
Whiteley, Rt. Hon. W.


Longden, F.
Pursey, Comdr. H.
Wigg, George


Lyne, A. W.
Randall, H. E.
Wilkins, W. A.


McAdam, W.
Rankin, J.
Willey, O. G. (Cleveland)


McEntee,, V. La T.
Reeves, J.
Williams, D. J. (Neath)


McGhee, H. G.
Reid, T. (Swindon)
Williams, J. L. (Kelvingrove)


McKay, J. (Wallsend)
Rhodes, H.
Williams, Ronald (Wigan)


McKinlay, A. S.
Ridealgh, Mrs. M.
Williams, Rt. Hon. T. (Don Valley)


McLeavy, F.
Robens, A.
Williams, W. T. (Hammersmith, S.)


MacMillan, M. K. (Western Isles)
Roberts, Goronwy (Caernarvonshire)
Williams, W. R. (Heston)


MacPherson, Malcolm (Stirling)
Robinson, Kenneth (St. Pancras, N.)
Willis, E.


Mainwaring, W. H.
Ross, William (Kilmarnock)
Wise, Major F. J.


Mallalieu, J. P. W. (Huddersfield)
Royle, C.
Woodburn, Rt. Hon. A.


Mann, Mrs. J.
Sargood, R.
Woods, G. S.


Manning, C. (Camberwell, N.)
Scollan, T.
Yates, V. F.


Manning, Mrs. L. (Epping)
Sharp, Granville
Zilliacus, K.


Marquand, Rt. Hon. H. A.
Shawcross, C. N. (Widnes)



Mathers, Rt. Hon. George
Shawcross, Rt. Hn. Sir H. (St. Helens)
TELLERS FOR THE AYES:




Mr. Snow and Mr. George Wallace.




NOES


Amory, D. Heathcoat
Grimston, R. V.
Morrison, Maj. J. G. (Salisbury)


Baldwin, A. E.
Harvey, Air-Comdre. A. V.
Morrison, Rt. Hon. W. S. (Cirencester)


Barlow, Sir J.
Headlam, Lieut.-Col. Rt. Hon. Sir C.
Nicholson, G.


Bennett, Sir P.
Henderson, John (Cathcart)
Nield, B. (Chester)


Birch, Nigel
Hogg, Hon. Q.
Noble, Comdr. A. H. P.


Boles, Lt.-Col. D. C. (Wells)
Hope, Lord J.
Prior-Palmer, Brig. O.


Bower, N.
Howard, Hon. A.
Roberts, H. (Handsworth)


Boyd-Carpenter, J. A.
Hudson, Rt. Hon. R. S. (Southport)
Robertson, Sir D. (Streatham)


Bracken, Rt. Hon. Brendan
Hurd, A.
Sanderson, Sir F.


Buchan-Hepburn, P. G. T.
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Scott, Lord W.


Carson, E.
Jeffreys, General Sir G.
Shepherd, W. S. (Bucklow)


Challen, C.
Joynson-Hicks, Hon. L. W.
Snadden, W. M.


Channon, H.
Kerr, Sir J. Graham
Stewart, J. Henderson (Fife, E.)


Clarke, Col. R. S.
Lancaster, Col. C. G.
Stoddart-Scott, Col. M.


Clifton-Brown, Lt.-Col. G.
Law, Rt. Hon. R. K.
Studholme, H. G.


Crosthwaite-Eyre, Col. O. E.
Lloyd, Selwyn (Wirral)
Turton, R. H.


Cuthbert, W. N.
Lucas-Tooth, Sir H.
Vane, W. M. F.


Darling, Sir W. Y.
McCallum, Maj. D.
Walker-Smith, D.


Digby, Simon Wingfield
McCorquodale, Rt. Hon. M. S.
Wheatley, Colonel M. J. (Dorset, E.)


Dodds-Parker, A. D.
McFarlane, C. S.
White, Sir D. (Fareham)


Drewe, C.
Mackeson, Brig. H. R.
Williams, C. (Torquay)


Erroll, F. J.
Maclay, Hon. J. S.
Willoughby de Eresby, Lord


Fraser, Sir I. (Lonsdale)
Macmillan, Rt. Hn. Harold (Bromley)
York, C.


Fyfe, Rt. Hon. Sir D. P. M.
Maitland, Comdr. J. W.
Young, Sir A. S. L. (Partick)


Galbraith, Cmdr. T. D. (Pollok)
Marples, A. E.



Galbraith, T. G. D. (Hillhead)
Marshall, D. (Bodmin)
TELLERS FOR THE NOES:


Gomme-Duncan, Col. A.
Mellor, Sir J.
Commander Agnew and




Major Conant.


Question put, and agreed to.

Clause 11.—(ENFORCEMENT OF REGULA- TIONS AS TO USE OF APPARATUS.)

Lords Amendment: In page 11, line 18, at end insert:
in a case where he considers that all reasonable steps to minimise interference have been taken in relation to the station or apparatus receiving the telegraphy.

Mr. Hobson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment makes statutory provision for what has always been my right hon. Friend's intention, namely that an enforcement notice making the use of electrical apparatus contrary to the regulations an offence should not be served on the user of the electrical apparatus where the interference can reasonably be eliminated at the receiving end. That is the case where there may be a defective wireless set, or where the alteration of an aerial can make the set not cause interference.

Lords Amendment: In page 12, line 17, at end, insert:
This subsection applies in relation to a notice under subsection (1) of this section which has been varied by a subsequent notice as it applies in relation to a notice which has not been so varied.

Mr. Paling: I beg to move, "That this House doth agree with the Lords in the said Amendment."
Where under Clause 11 (1) the Postmaster-General serves an enforcement notice, subsection (3) gives a right of appeal to the tribunal. By subsection (2) the Postmaster-General has power to vary the notice by serving another notice. We are anxious to assure, by putting these words in the Bill, that where the Postmaster-General varies a notice, and there is a second notice, the right of appeal shall also apply to the second notice. When the Bill was before the House it was stated that there was some doubt whether a right of appeal would apply in such circumstances. This Amendment makes it certain.

Mr. Charles Williams: I am not quite happy about this Amendment because the words are rather confusing. May we have a fuller explanation, as I am sure it would be welcome. The Amendment contains considerable amount of reference. I

want to know how far these variations would go and why this Amendment could not have been made on the Committee stage of the Bill? On the whole, the other place has been wise in putting forward this Amendment, as they almost always are, but I wish that the Postmaster-General would give a rather wider explanation. This does not seem to be an Amendment which is without substance I see that the Assistant Post-master-General agrees. Therefore, we should have a little more explanation.

Lords Amendment: In page 12, line 21, after "heard," insert:
and has, in accordance with the rules regulating the procedure of the tribunal, procured himself to be made a party to the reference.

Mr. Hobson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
Where a case goes before a tribunal there may be a desire to be represented and intervene and it is only right that there should be power for such persons to be paid their costs or to pay the costs awarded against them. It is to the end that we propose to agree with the Lords Amendment.

Lords Amendment: In page 12, line 30, at end, insert:
(c) if they are satisfied that compliance with the said requirements or those requirements as directed to be varied, would impose unreasonable cost (not being less than one hundred pounds) upon the person having possession of or any interest in the apparatus they may if they think fit direct the Postmaster-General to allocate the cost in such proportion among such persons or class of persons and in such manner as may be specified in the direction.

Mr. Paling: I beg to move, "That this House doth disagree with the Lords in the said Amendment."
This Amendment gives power to the appeal tribunal to be set up under the Bill, if they are satisfied that compliance with the requirements of the regulations would impose unreasonable cost on the person possessing or having an interest in apparatus, to direct the Postmaster-General
to allocate the cost in such proportion among such persons or class of persons and in such manner as may be specified in the direction,
if the cost would amount to more than £100.
The Amendment is singularly vague both as to its practical application and the machinery for its enforcement. If the tribunal should direct the Postmaster-General to allocate the cost, no indication is given of the action which would fall to be taken by the Postmaster-General. It would be the function of the Tribunal itself to specify in what proportion among all the persons and in what manner the allocation should be made. If the intention is that the Postmaster-General should notify tine persons concerned of the sums allocated to them and should recover those sums from them, there are three comments to be made. The first is that the Amendment does not say this. The second is that the Amendment does not provide the Postmaster-General with power to recover the sums allocated or say when those sums should be payable or how the Postmaster-General shall deal with the sums when recovered. The third is that functions such as these would be strangely inappropriate to the Postmaster-General, who will be concerned not as a functionary of the tribunal but as a party to the proceedings in his capacity as guardian of the ether.
9.15 p.m.
Again, the Amendment does not give to the persons among whom the cost is allocated the elementary right to be heard by the Tribunal on the justice of the allocation, and if there is one thing which hon. Members have insisted upon it is the right of appeal in all these disputed matters—but this would not be the case in this particular instance. In theory and in equity, the allocation should be made between all the persons who would benefit from the suppression of the interference in proportion to the degrees of benefit. How these persons would be identified I do not know, and I do not think anybody else could know. It may be that it can be done with classes of persons. It may be that the interference would affect a class of person, say, six, 10, 20, 50 or perhaps 100, and the Postmaster-General or somebody else has to find out the individual, and, when he finds him out, he has no power to do anything about it. Presumably, it would still go on as usual.
I have some sympathy with the outlook of those who proposed the Amendment, but I think we have gone a long

way to meet their point of view in providing protection against undue burdens being unreasonably imposed. First of all, there are the regulations prescribing the requirements to be complied with in respect of the apparatus to be used. Hon. Members know that the people who will make the regulations are to be very carefully selected, firstly, from among people whose technical knowledge of the industry is of the greatest, and also from people, especially on the Advisory Committee, whose interests are also affected, and the Postmaster-General is compelled to select the Committee from persons of that kind. That in itself is a reasonable safeguard.
Then there is the Amendment to be moved later, to which I have referred, providing that, at the tribunal itself, the question of undue interference will not be merely a matter of how much interference is caused by the emission of the interfering frequencies, but also that the tribunal must take into account the question of how much hardship would be caused if the person responsible had to pay what appeared to be rather a large sum. That is a second protection.
The next step is that nothing can happen to anyone until the Postmaster-General has served an enforcement notice under the Act. Regulations will be recommended by the Committee and will be made, but, although it may be that perhaps next year thousands of pieces of apparatus will not be in accordance with the regulations, that fact does not mean anything to these people. Nothing can be done until these pieces of apparatus cause undue interference, and when, because of that, and when all these things have been gone through, the Postmaster-General serves a notice. I hope that no hon. Member feels that either myself as Postmaster-General or any other Postmaster-General will go in for serving an orgy of these notices. That is about the most unlikely thing that can possibly happen.
Then there is the question, which is also important, and even with this Bill it will still remain important, of voluntary co-operation, and, in any of these bigger cases, where a considerable sum was likely to be concerned, it would be a matter of talking it over and considering it point by point in every particular be-


tween our people and the people concerned, and trying to arrive at a decision. As a matter of fact, that is what is happening now, and is likely to happen in the future. It would not be until everything else had failed that this other procedure would take place.
Last but not least, there is the question of the Appeal Tribunal. If all these things fail, then the person or persons concerned will go to the Appeal Tribunal and the decision will be made there, together will the fact that under the Amendment which has just been added the question of hardship would be brought to bear in any decision which the Appeal Tribunal came to. I say, therefore, that the Measure is needed, but it could be reviewed if time and experience showed a real need for that. When regard is had to the safeguards incorporated in the Measure, I think it will be found to give adequate safeguards. As a matter of fact, it was said that we were overloading the Bill with safeguards.
I am not prepared to write into the Bill financial provisions on the lines of the Amendment, but if in practice difficulties of a financial character should arise which cannot be surmounted in the ordinary course of negotiations conducted in a reasonable spirit of give and take, the Government would be prepared to give their sympathetic consideration to the position, and if convinced that something, should be done, would do their best to meet the situation, and, if necessary make proposals to Parliament.

Mr. Grimston: The Postmaster-General has entirely missed the point at which this Amendment is directed. I do not want to be long at this late hour, but I really must put the point before the House because it is one of some substance. I think I can do it best by illustration. We will presume, for the sake of this illustration, that the Admiralty wishes to put up a wireless station somewhere, or it may be the Postmaster-General, and it is found that one of the grid systems, either the Electricity Board or the Hydro-Electric Board, with which my hon. Friend will deal later, has a series of overhead lines which emit interference, and perhaps prejudice the operation of the station. What happens is that the Admiralty and the Electricity Board or the Hydro-Electric Board can get together and come

to some arrangement, because it may well be that in order to stop this interference the Electricity Board may have to incur very high costs in laying, perhaps, a great deal of underground cable, which, in turn, will impinge on the cost of electricity to industry at a time when the Chancellor and everybody is saying that we must keep costs down.
It may be that the Admiralty, or whatever Department it is, and the Board will come to some arrangement to share the cost, but I think that anybody who has had experience of Government Departments will know that very often they need having their heads knocked together, and I suppose there are no worse instances of "passing the buck" than those which exist in Government Departments. Suppose the Admiralty refuse to pay anything, the Postmaster-General may come along, and, under order, compel the Electricity Board to install this apparatus at great loss in order to prevent interference. The next thing that happens is that the Electricity Board can go to the tribunal which can either uphold the Postmaster-General or can give the case against him. What it cannot do is to allocate costs.
The Tribunal may very well say that there is undue hardship to the person—in this case the Electricity Board—and that they will not uphold the Postmaster-General. In that case, the Admiralty station will not work. Surely, this provision which will give an independent tribunal power to allocate costs and to compromise in a dispute between Government Departments in a case of that sort ought to be put into the Bill. I can see no earthly reason why it should not. There is nothing to stop the two Departments from coming to an agreement if they wish. For the life of me, I cannot understand why the Postmaster-General refuses to put this very reasonable provision into the Bill.

Colonel Gomme-Duncan: My hon. Friend the Member for Westbury (Mr. Grimston) has dealt with the general principles underlying this excellent and, we think, most necessary Amendment. I entirely agree with him that the Postmaster-General, albeit with great charm, as usual, has missed the point and has not given us any satisfaction whatsoever. I think it is perfectly clear what this


Amendment asks for, although he says it is not clear. We have to remember that the Postmaster-General himself, when he is brought into this matter, is very much—or will be very much—a prejudiced party in any dispute there may be. He asks, "How am I to dispose of the money which is to be collected from these different people if the cost is allocated as between the electricity apparatus user and the wireless user?" He can dispose of that money just as well as he can dispose of the money from the people from whom he will get it anyway—the users of the apparatus. There is no difficulty whatsoever about how to dispose of money, as the head of any Government Department ought to know by now.
We were very hopeful at one time that the Government would see reason in another place about this Amendment. There, the Government said that they would consider the matter urgently with a view to doing what they could to ease the burden of any large public authority concerned with the supply of electricity. I propose to confine my remarks to a large supplier of electricity—the North of Scotland Hydro-Electric Board. It is of the greatest importance that as much electricity as possible at the cheapest possible rate should be supplied to the people of the scattered, sparsely populated districts of Scotland. That is, we consider, a fundamental necessity.
If this Amendment is not accepted there will be grave risk that the cost of electricity to those very people will be very substantially raised. My hon. Friend has pointed out that it may be necessary for a supplying authority such as this to put cables underground instead of overhead. It may be of interest to hon. Members to know, if, perhaps, they do not know already, that to do that in the Highlands of Scotland might cost a minimum of £22,000 per mile, which is a very considerable sum to add to the cost of electricity to the people for whom we are hoping to provide it cheaply. That is one of the illustrations which, I think, show very clearly what a serious effect it will have on this electricity authority if this Amendment is not accepted.
We must be perfectly clear on one or two points. The first is that what the Lord Privy Seal, in another place, described as safeguards are not safeguards at all in this particular respect, although the Postmaster-General has repeated that he thinks there is every possible safeguard. The Lord Privy Seal said that the first thing it was necessary to secure as a safeguard for this particular purpose was that any difference between Government Departments should be settled by sensible discussion and compromise. My hon. Friend has pointed out that of all bodies in this world Government Departments seem to be, in fact and in practice, the least suitable for coming to a friendly compromise on matters on which they disagree. We have all had experience of that.
It is important for the Postmaster-General to realise that the North of Scotland Hydro-Electric Board is not a Government Department, and that it is subject to all the penalities imposed by the Bill, whereas the opposing authority, which is a Department of State, is not subject to anything of the kind. The North of Scotland Hydro-Electric Board will come into the argument with its hands tied, to all intents and purposes, and I cannot see that what the Minister suggests—the sweet reasonableness always found between two Government Departments—will be discovered when one Government Department is dealing with an authority which is not a Government Department. I hope we shall hear something from the Minister on this subject because it is a fact, whatever he said, that it is not just a matter of sweet reasonableness between two Government Departments.
9.30 p.m.
The Lord Privy Seal added that there were three safeguards which were adequate. The first of these was the advisory committee. Those of us who have had experience of advisory committees have a very poor idea of their value in safeguarding the consumer. In any case, this advisory committee cannot save the authority the expense which will be laid upon it if it is found that there is interference as a result of their working. He then said that the use of the apparatus must be likely to cause undue interference. Of course, that is no safeguard as far as cost is concerned; it merely


prevents unnecessary cost being thrown on the Hydro-Electric Board, as is desirable, but the necessary cost which is not covered may be very substantial indeed, as I have endeavoured to point out, for instance, in putting cables underground.
He then spoke of the third safeguard, which is that of the tribunal. Again, tribunals have their use, as we know, but, personally, I do not think the Hydro-Electric Board will be in any way safeguarded by the Tribunal in the matter of the payment of charges. It may be possible, under the Tribunal's ruling, to get away without paying anything at all, but in that case it is perfectly clear that the reason for putting that charge on the Hydro-Electric Board will be done away with or, rather, the reason will remain and the faults and the dangers will still be apparent to the user. Nothing will be done at all, although the original charge was due to the fact that the Minister thought something should be done. It merely washes out the charge to be made, and has no effect upon what is to be done in the way of paying and allocating payment as between the different parties concerned.
I could go on with a great deal of detail, but I shall not do so because the hour is late and there is much more Business to come before the House. What I want the House, and particularly the Postmaster-General, to realise is that the North of Scotland Hydro-Electric Board have a very difficult and highly responsible job to do; and that, as experts in their particular line of business, they are very disturbed at the fact that if this Amendment is not retained in the Bill they will have to pay very large costs which, frankly, they do not feel their financial position enables them to pay except by means which are most distasteful and are against the wishes of this House—raising the cost to the consumer in the Highlands of Scotland.
This authority is not a Government Department; it is not like the British Electricity Authority in England in that respect, but is an independent body. Raising the cost is the only possible way in which they can carry out the orders of the Minister, if he says that they are to pay the costs of interference, which in this case might be on a colossal scale; they must be. The Hydro-Electric Board in

the North of Scotland carry a grid over what is perhaps some of the most difficult country in the world and they are doing it very well in circumstances of the greatest difficulty. One thing the Board must do is to keep expenses down as low as possible.
It is impossible for this authority to carry out its pledge and indeed to carry out the instructions which this House of Commons has given to it if the Minister does not accept the Amendment inserted in the Bill in the other place. In conclusion, I would say that the British Electricity Authority in England heartily supports this plea by the North of Scotland Hydro-Electric Board, as does the similar authority in Northern Ireland. I cannot believe that this House will go against such experts as that and I feel certain that we shall have a reasonable answer so that, even if the Minister cannot accept the detailed wording of this Amendment, he will accept the great principle of it and retain it in the Bill.

Mr. Erroll: I thought the Postmaster-General was singularly unconvincing when he invited the House to disagree with the Lords in this Amendment, because it is quite plain that, whereas in the discussion of an earlier Amendment he invoked the aid of experts, on this occasion he has not sought the advice of the experts so admirably outlined by my hon. and gallant Friend the Member for Perth and Kinross (Colonel Gomme-Duncan). It is obvious that as soon as the Postmaster-General saw his own name in the Amendment he said "I must avoid this job of work at all costs." He crouched low over the Despatch Box in case the job of work landed there and then on his shoulders, without even pausing to consider whether the tasks this Amendment would impose upon him were serious or onerous.
The Postmaster-General suggested that if this Amendment were accepted it would place him in an impossible position; that he would have to decide how the costs were to be allocated; and that he would have the impossible task of collecting the moneys, without perhaps knowing to whom they should be paid. If he looks at the Amendment again he will find that all these matters are very clearly dealt with. In the first place, it is obvious that the bills for carrying out the work of suppression will be sent to the owner of


the apparatus, who will have to pay them. All that happens is that the person who has to pay the bills will be able to recover contributions from the various persons nominated by the Postmaster-General.
Now the Postmaster-General does not have a free hand; he is not placed in the quandary of having to decide to whom he should allocate the various proportions of the cost, because that is all decided for him by the Tribunal. The Tribunal, if they think fit, may
direct the Postmaster-General to allocate the cost in such proportion…and in such manner as may be specified in the direction.
The Postmaster-General is merely the agent of the Tribunal. The Tribunal decides the proportions of the cost and the individuals from whom various proportions should be collected. It is merely for the Postmaster-General to allocate the actual figure in pounds, shillings and pence to each participant. Surely that is a task which is not beyond the wit of the Postmaster-General. If those were his only grounds for disagreeing with this Amendment, then in face of the impressive evidence marshalled by my hon. and gallant Friend I hope that the House will see its way to agreeing with this Amendment and writing it into the Bill.

Mr. McKie: I very much hope that the Assistant Postmaster-General will be able to say something in reply to the very cogent arguments advanced in favour of this House agreeing with the Lords in this Amendment. I agree with every word said by my hon. and gallant Friend the Member for Perth and Kinross (Colonel Gomme-Duncan) about the inadequate manner in which the Postmaster-General attempted to deal with this matter. I represent a constituency in the Lowlands of Scotland where the first Hydro-Electric Board came into being, and I have every sympathy with what my hon. and gallant Friend said about the possible danger to the consuming public of increased costs if this Amendment is not accepted.
It is quite true that in one of the counties I have had the honour to represent in this House costs to the consumer have not been raised. But in the other, which did not have the advantage of the supply of electricity from the first Hydro-Electric Board in Scotland, there have been, over a long period of years, many

complaints about the cost of supplying electricity to the ordinary consumer. Since electrical undertakings in general were nationalised there has been nothing to allay those fears, and I am of opinion that if this Amendment is not accepted, not merely will their fears go unallayed but the costs to the consumer will be very materially increased. I should have thought that a Socialist Government in all events would have been at great pains to ensure that the consuming public, particularly the small consumers, were not penalised in such a way as this.
It is not for me to proffer advice to the Government with an election in the offing, but I should have thought that if they did not agree to this Amendment they would agree to something which would be in their own interests in view of the impending election. [Laughter.] The hilarious way my remarks have been received by hon. Members opposite leads me to believe that my chances of reelection are much greater than those of some Scottish hon. Members opposite. It is not for me to proffer any advice on that score, because I hope to benefit from all the mistakes that the Government make. But this is not a question of party. It is a question of doing our best to protect the interests of the small consumer. I cannot understand why the Postmaster-General should have turned a deaf ear to this proposal, and I hope the Assistant Postmaster-General will be in a position to agree to this Amendment, having regard to the small people who will benefit from it.

Mr. C. Williams: The Postmaster-General told us that if anything went wrong we could rely on the Government to look on it as a matter of sympathy. I know he would like to do that, but I have completely and utterly failed to understand how it can be done. I have searched through a long list of cases in which really good people wanted sympathy, and a long Parliamentary experience has taught me—[HON. MEMBERS: "Too long."] I agree, very much too long for the Socialists, but not long enough for sensible people, as my constituents have found out. I must not go into that matter, but I would say that wherever a promise of this sort is made we should not allow the Government to escape from that promise when a real crisis arises.
I listened to the Postmaster-General with very great care as I always do, and I appreciate that he had a brief. At first I could not make out what had happened. What he said did not appear to bear any relationship to the Amendment we were discussing, until my hon. Friend the Member for Westbury (Mr. Grimston) and my hon. Friend the Member for Altrincham and Sale (Mr. Erroll), explained the position. Then I became aware of what had happened. The Postmaster-General, by some curious twist, read the wrong brief. There is no other explanation of what he said, and if he reads it tomorrow in HANSARD he will see that what I say is right, that it bears no relation whatever to this Amendment. His statement was completely irrelevant.
9.45 p.m.
Under this Amendment it is quite clear what will happen. Certain duties are laid on the body proposed by the Amendment and the Postmaster-General will be able to avoid what I want to see avoided, namely hardship to the individual. My hon. and gallant Friend the Member for Perth (Colonel Gomme-Duncan) put the case for the Highlands. I represent a part of the South country, and I feel that I could put a similar case in regard to innumerable instances in rural districts in the South, in Wales, in the Midlands and elsewhere. It is our duty as a House of Commons not to look after the interests of the Government in placing burdens upon individuals, but to look after the individuals and to save them from the unnecessary and often wicked burdens which are put on them by the Government of the day. I hope that hon. Members will vote in favour of this sensible Amendment, because it is obviously in the interests of the ordinary persons of this country.

Mr. Speaker: rose—

Mr. Grimston: On a point of Order. Are we not entitled to some reply from the Assistant Postmaster-General?

Mr. Speaker: That is a matter for the Government Front Bench to decide.

Mr. Hobson: I was just going to get up. [HON. MEMBERS: "No."] Perhaps I might briefly reply to the points that have been raised. I shall not attempt to follow the arguments of the hon. Mem-

ber for Galloway (Mr. McKie) with regard to what should be the correct tariff for the Scottish Hydro-Electric Board to charge for their electrical energy. The hon. Member for Torquay (Mr. C. Williams) seemed to be under the impression that the regulations will be entirely arbitrary. In point of fact, the tribunal will have the power to relax the regulations in favour of appellants. I fail to see how it can be said that my right hon. Friend is acting in an arbitrary manner.
The speech of the hon. and gallant Member for Perth (Colonel Gomme-Duncan) appeared to be special pleading for the Scottish Hydro-Electric authority. There is no intention, by regulation or by order of my right hon. Friend to compel the Scottish Hydro-Electric authority or the British Electrical authority to lay all their cables underground because they might cause interference. If there were any question about the siting of pylons, there would be complete consultation among all the departments concerned. Suppose, as a result of a leaky insulator on a high tension pylon, there were interference; does the hon. and gallant Gentleman suggest that the Post Office should pay for the costs of keeping in full and proper maintenance the whole of the network, simply because of that neglect of maintenance?

Mr. Grimston: Would not the hon. Gentleman agree that there might well be interference from other causes than faulty maintenance?

Mr. Hobson: I agree, but I am dealing with the Amendment as it left the other place, and with the reasons why my right hon. Friend cannot agree with the Amendment. There is the other point that this suggestion does not deal only with electrical authorities, who are not the only people or the only commercial concerns likely to cause interference. Electrical apparatus in industrial establishments can cause considerable interference. Do the Opposition suggest that we should pay for the whole cost of protecting that apparatus and preventing it from causing interference? That would be something entirely new. Nobody suggests that because the Ministry of Labour says that under the Factory Acts machinery should be protected that the whole of the cost should fall upon the Ministry of Labour. That seems a fair analogy.

Colonel Gomme-Duncan: rose—

Mr. Hobson: Where interference is being caused, it is entirely wrong that the Post Office should have to meet the cost, if it needed more than the sum of £100 to remove the interference. The later Amendment mentioned by my right hon. Friend gives the ordinary individual a chance, and it prevents an arbitrary Government official placing a burden on his shoulders.

Colonel Gomme-Duncan: Before the hon. Gentleman sits down, in view of the really astonishing misrepresentation of what I have said—I am sure it is quite unintentional but it is misrepresentation

as clear as daylight—may I say that I never suggested that we were only dealing with an electrical authority—

Mr. Speaker: The hon. and gallant Gentleman has exhausted his right to speak.

Colonel Gomme-Duncan: With great respect, Mr. Speaker, I have been grossly misrepresented, and I was trying to put it right.

Question put, "That this House doth disagree with the Lords in the said Amendment."

The House divided: Ayes, 232; Noes, 97.

Orders of the Day — COAL INDUSTRY BILL

Lords Amendments considered.

Title

Lords Amendment: In line 3, leave out "and."

10.12 p.m.

The Minister of Fuel and Power (Mr. Gaitskell): I beg to move, "That this House doth agree with the Lords in the said Amendment."
Perhaps I might draw attention at the same time to the two following Lords Amendments:
In line 4, after "contracts," insert:
and provide for the enforcement against them of certain workmen's compensation liabilities.
In line 9, after "thirty-seven," insert:
and to repeal the provisions of that Act imposing restrictions on the disposal of government stock issued for compensation to companies.
They are all alterations in the title consequential on the two new Clauses to which we shall come later.

Clause 1.—(ALTERATION OF COMPOSITION OF NATIONAL COAL BOARD.)

Lords Amendment: In page 2, line 4, at end, insert:
() The persons from amongst whom the members of the Board are by subsection (3) of section two of the principal Act required to be appointed shall include persons appearing to the Minister to be qualified as having had experience of, and having shown capacity in, the coal-mining industry.

Mr. Gaitskell: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment was inserted on the suggestion of one of the noble Lords in another place who pointed out that there was a difference between the wording of the original Act in respect of the qualifications required to be a member of the Board and the corresponding Clauses in the other Nationalisation Acts. The Coal Nationalisation Act simply describes the persons from whom the Minister must select the members of the Board as being:
persons appearing to him to be qualified as having experience of, and having shown capacity in, industrial, commercial or financial matters, applied science, administration, or the organisation of workers.
But there was no specific reference to the coal industry, whereas in the case of the Electricity Act the first of the categories from whom the Minister shall appoint Members is:
persons having had experience of, and having shown capacity in, the generation and supply of electricity…

Mr. Brendan Bracken: Let me begin by congratulating the Minister on accepting so many Amendments. Almost all the Amendments put down by the Government are very good. The Opposition can say so with unchallengeable authority, for they repre-


sent proposals made to the Minister both on the Floor of this House and upstairs, and were vehemently denounced by the Minister. We have been kept waiting for weeks and weeks to discuss this Bill because of the obstinacy of the Minister. Now he accepts our Amendments on the recommendation of the other place. I must say that it is a great waste of Parliamentary time for the Minister not to listen to us and then to go through this whole process of coming here to-night and accepting Amendments that were proposed to him during our long discussions on this Bill. The conversion of the Minister is miraculous. Never since Moses struck the rock and found water has there been anything so surprising—[An HON. MEMBER: "Or so wet."]—save, perhaps, the watering of the parched town of Porthcawl by the right hon. and lachrymose Gentleman.

Clause 2.—(EXTENSION OF AREA WITHIN WHICH THE BOARD'S ACTIVITIES MAY BE CARRIED ON.)

Lords Amendment: In line 23, at end insert:
Provided that before the Board carry on any of the activities referred to in paragraphs (b), (c), (d) or (e) of subsection 2 of section one of the principal Act in any country or place overseas the carrying on by them of that activity in that country or place shall have been approved by resolution of each House of Parliament.

10.15 p.m.

Mr. Gaitskell: I beg to move, "That this House doth disagree with the Lords in the said Amendment."
I am very sorry so soon to disillusion the right hon. Gentleman, but this is an Amendment which we cannot possibly accept. Perhaps I might remind the House of the circumstances in which Clause 2 of this Bill came to be drafted. Under the original Act, the Coal Industry Nationalisation Act, 1946, the National Coal Board are prevented by Section 63 (3) from carrying on activities overseas. If I may, I will read the exact words, which are in the interpretation Clause of the original Act:
(3) References in this Act to activities of any kind (whether or not described by that word) shall be construed as limited to activities of that kind carried on in Great Britain, but not so as to exclude, in the case of selling or supplying, selling or supplying for export or selling or supplying imported goods in Great Britain.

The purpose of that subsection was to prevent the National Coal Board from becoming involved in taking over the overseas assets of the colliery companies, but it was unfortunately so drafted as to prevent them from carrying on certain other necessary activities outside this country in connection with the export of coal. That was not the intention of the Act, but it did have that effect. Accordingly, Clause 2 of the Coal Industry Bill provides that this limitation imposed by Section 63 shall not apply to Section 1 of the Act, which is concerned with the functions of the National Coal Board.
The Lords Amendment, in effect, would prevent the National Coal Board from enjoying this freedom, except specifically and in each case after Affirmative Resolutions of both Houses of Parliament. I have no hesitation in saying that the passing of this Amendment would really wreck Clause 2 of the Bill altogether, and I will endeavour to show the House why that must be so. What is it, first of all, that we want the National Coal Board to have power to do?

Mr. Bracken: Produce coal.

Mr. Gaitskell: Not in this particular instance. What we want them to have power to do is not so much to produce coal, though it is perfectly true that under this Clause they would also have the power to produce coal abroad—and a good deal of discussion took place on that topic during the Committee stage—but to carry on certain activities connected with the export of the coal produced here. It is not, however, in order that the Coal Board shall take over all the functions performed at present by merchants in the exporting field that we are asking the House to accept the original Clause. On the contrary, I repeat that the Coal Board have excellent relations with the coal exporters, and that, on the whole, the arrangements so far made have been satisfactory to both parties, and it is not our intention in a wholesale fashion to attempt to displace the exporters.
What, then, is it that the Coal Board wish to do? There are several things. In the first case, they wish to set up as soon as possible an office for the sale of coal in Europe. I think every hon. Member will agree with me that that is a perfectly sensible and reasonable thing


to do. They may also wish to do it in other parts of the world, but, as it happens, the thing they want to do at the moment is to set up an office for the sale of coal in Europe, probably in Paris. We are often told by the Opposition—and I certainly make no complaint about it—that things are getting more and more difficult in the coal market. It is undeniable, of course, that as Polish, Ruhr and our own coal output increases there will be great competition for the sale of coal in Europe and elsewhere. Therefore, it is desirable that the selling activities of the Board should be increased, and that nothing should be put in their way. They cannot do that under the present Act; they are forbidden to set up an office overseas.

Colonel Crosthwaite-Eyre: What would the suggested office in Paris do which British exporters cannot do on behalf of the Coal Board at the moment?

Mr. Gaitskell: I should have thought it was far more convenient for the Coal Board to have an office of their own in Paris when importers come along and ask what qualities are available and whether they can buy, and so on, than to have to go through some British exporter who may or may not have an office in Paris himself.
In the second place, the Board also want to make sales c.i.f. At the present moment they cannot do that; they can only make sales f.o.b., and I really cannot see why they should be denied the opportunity of quoting to foreign buyers a price for coal including freight. It may be said, "Well, why should they bother?" It may also be said that, after all, the Board could always say to any importer who comes along and wants to buy c.i.f., "Go to an exporter and he will arrange this for you." I think that is a reasonable comment. The answer is that there are circumstances in which the merchant concerned would not be willing to take the risk of quoting a sufficiently low price for the freight, and there are circumstances in which it would pay the Coal Board to do this because they were very anxious to get into a particular market. Therefore, we may very well have the position—I do not say it will happen all the time—where

the c.i.f. quotation which the Board can offer is lower than that which the merchant can offer.
I should have thought that it was common ground that we desired to do everything we could to assist British exports of coal, and here is a case where, if we did not give the Board the power to make sales in this way, we should be definitely risking—I will not put it any higher—interfering with sales of coal. That is the second reason. I will say in that connection that the Coal Board have recently lost the opportunity of selling, not coal, because that is not the case, but certain products of carbonisation because they were not able to quote c.i.f. They have had inquiries from Finland and Denmark for creosote, pitch, anthracene, and so on, and they were asked at what c.i.f. prices they could supply them. They had to write back and say, "We are very sorry, but we cannot, in fact, quote c.i.f.; we are debarred from doing so," and the business went elsewhere. It may be that in one case it went to some other firm in this country, but in at least one case the business was lost to this country as a result.
We have the curious position that the area gas boards, who also, of course, have by-products of the same kind produced from their gas retorts in contrast with the Coal Board's coke ovens, are in the position to quote c.i.f., and can, in fact, meet the importer's wishes in this way, whereas the Coal Board, by reason of this unfortunate phraseology in the original Act, are not able to do so. I think we are all agreed on this; I cannot imagine even the Opposition suggesting that we should allow the gas boards to quote c.i.f. but not the Coal Board. What conceivable purpose could there be in restricting them in this fashion? There may be occasions when it is necessary to co-ordinate the activities of the Coal Board and the gas boards and provision is made for that under the Act, but here is a case where there is much to be said for competition between them—but it must be fair competition.
Again, the Coal Board may wish to acquire an interest in bunker depôts abroad. Why should they want to do that? There may be occasions—and, of course, we discussed this very fully upstairs in Committee—where it so happens


that no British merchant owns space or has a depôt in a particular place overseas and where, obviously, we need one from the point of view of Britain as a whole. There may be other circumstances, for instance, in which, if we ran into slack times, the Coal Board would wish to stock coal at the bunker depôts abroad as an act of policy. As a matter of fact, some of the colliery companies before the war had their own subsidiary exporting organisations which did this, and it was a very sensible thing to do, if I may say so. It enabled the pit to keep going here while, at the same time, providing space for stocks overseas.
Closely linked with that would be the case where it was desirable to purchase an interest in an importing concern overseas. Here we are, in so many spheres and so many activities, telling our exporters that they must get busy, that they must be more active selling abroad, and that they must not rely wholly on the ordinary importing organisations in the United States and Canada. I can well understand that it may be desirable for the Coal Board to do the same thing. No doubt, it would be convenient for them to have some share, for example, in a coal wharf in Canada through which they could ship the anthracite—shipping there has to take place during the summer months and one needs to stock up during the summer months, because of the closing of the St. Lawrence during the winter. That is another thing which, like others I have mentioned, they are forbidden to do under the present Act. Again, they may wish to advertise or take part in overseas trade fairs of various kinds. They cannot do that at the moment.
One other example which I would like to give the House is, I think, of considerable importance. At the moment they are debarred from holding foreign patents. It may quite well happen that some invention or discovery is made by the officials of the Coal Board which is of considerable value. Surely, in those circumstances, it would be greatly to the national advantage that they should be able to hold foreign patents. If they do not there is a risk that they get no protection whatever in those overseas territories, and obviously they would lose the opportunities which the right to hold patents abroad would

give them to control trade in the particular thing which is discovered.
I will give an illustration, if I may. A great deal of work is being done on patent fuel and I think it is not unlikely that the Coal Board's research in that direction will be crowned with success before long. I know they are very hopeful about it. If they were to discover some rather easily-made, easily-saleable, generally-popular patent fuel, it would be most desirable that they should have the foreign patents. They cannot do so at the moment and, therefore, we are, by leaving them in this position, simply causing them to waste money on research when they cannot get the benefit because of the way they are tied down by the original Act.
So much for the activities which they wish to carry on. I hope I carry the House with me when I say that all of them seem to be entirely reasonable. They do not seem to me to suggest that the Coal Board are going to attempt to wreck the export trade which is now being carried on. They have the greatest possible incentive to maximise coal exports.
10.30 p.m.
It is sometimes said that the coal exporters started as individual merchanting firms and that they have built up the business entirely on their own. Certainly, to start with, a number of individual merchants did that, but it is the fact—and I emphasise this particularly—that before the war quite a large proportion of the export trade was carried on by subsidiary companies of, or companies connected with, the colliery producing companies themselves. I am sure the hon. and gallant Member for East Grinstead (Colonel Clarke) will agree with me, because he is connected with one of these firms. I took out some figures for South Wales, the largest exporting area in 1938. No less than 58 per cent. of our total coal exports from South Wales in 1938 were handled by exporters connected with the colliery producing concerns. What we are saying, in effect, is that that link which existed before the war should not be broken in this way.

Colonel Clarke: If the Minister will allow me to ask a question, will he also state the reason that led the colliery companies to export


through separate firms? They found that producing coal was quite enough of a business in itself and that the sale or distribution was very much better managed by separate organisations. What we are suggesting today is that the process existing then should continue and that the Coal Board should confine their activities to producing coal—and I will not criticise anything they have done in that direction—and leave distribution to those who have done it in the past, in the same way as the coal companies of old had their subsidiary companies.

Mr. Gaitskell: I am sorry the hon. and gallant Member has so completely missed the point. If he says he wants the Coal Board to carry on as in the past, he is saying in effect that the Coal Board should have the right to buy up coal exporting firms and exercise control over them; but they cannot do that under the existing Act. The question of what form export arrangements should take is quite a separate one. As a matter of fact, as the hon. and gallant Member also knows, the persons who are responsible within the Coal Board for this side of the Board's activities are, I think all of them, drawn from the merchanting side of the business, and the chief executive is a man of very great ability and business shrewdness, well known to the hon. and gallant Member for East Grinstead. As I say, we are simply asking that the Coal Board should be able to do what the producers were able to do and to do very freely.
Now I come to the specific effect of the Amendment. The fact is that the Amendment would be completely unworkable. What does it provide? It says that:
before the Board carry on any of the activities referred to in paragraphs (b), (c), (d) or (e) of subsection (2) of section one"—
in fact, all their activities; for there is no sense in selecting (b), (c), (d) and (e) except that they leave out (a) and (f) which have nothing to do with activities overseas—
…the carrying on by them of that activity in that country or place"—
or place, mark you!—
shall have been approved by resolution of each House of Parliament.
Could anything be more ludicrous? Can one seriously suppose it is reasonable for

the Coal Board, if they want to open an office in a different town overseas to go through the elaborate paraphernalia of Affirmative Resolution in both Houses of Parliament? Can we really suppose that when they are asked to make a c.i.f. sale, the Board must first of all come and get an Affirmative Resolution through both Houses of Parliament? Are hon. Members to suppose that people who are to buy this coal are going to wait while we solemnly go through this elaborate procedure? Do they really suggest that if the National Coal Board wish to purchase an interest in an overseas bunker depôt, they must disclose this to both Houses of Parliament? What sort of business deal can they do in those circumstances?

Mr. Bracken: The right hon. Gentleman has raised a point of great importance. Do I understand now that it is the policy of the Coal Board to buy up foreign depôts, that is, depôts owned by competitors or British bunkerers and coal exporters? Do I understand that the National Coal Board are to spend money abroad to harm the interests of the exporters in Britain?

Mr. Gaitskell: The right hon. Gentleman need not get so excited. He has referred to my emotionalism, but he is not free from it himself sometimes. I have said that the National Coal Board might wish to acquire an interest in a bunker overseas so that they might, for example, stock coal in that overseas depôt during a time of slack trade. It is a reasonable thing for the Coal Board to do. I do not know whether the right hon. Gentleman is going to defend the proposal that the National Coal Board should have Affirmative Resolutions of both Houses of Parliament before such a deal could go through.
There has been a good deal of talk, during the passage of the Bill, about the setting up of Government selling agencies. Opposition Members have spoken as if the Government were going into this business. The Bill was criticised on the ground that it would be bad for the export trade to have the Government in the picture. I am not going to argue that point. It may be bad or it may not be bad; but the fact is that the Government are not going into the picture. The Government are not concerned. It


is the National Coal Board which is concerned. The hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) is always lamenting the fact that the Government are not answering for everything which the National Coal Board do. There is a perfectly clear distinction.

Mr. Boyd-Carpenter: As the right hon. Gentleman has referred to me, may I say that my objection is not to Government non-interference with the Coal Board, but to the Government's refusal to accept responsibility to Parliament for the interference.

Mr. Gaitskell: I am glad that the hon. Gentleman is not suggesting that if the Coal Board set up any selling agency abroad, it is the Government which is supposed to be setting it up, because actually there is a complete difference between the two. It is an entirely different matter. I have already referred to the fact that it is not a question of Government officials coming along and trying to intervene in this matter. The marketing people in the National Coal Board are skilled men. They have themselves spent a lifetime in selling coal and I and those who know them have every confidence in their ability. But if we have to come to Parliament for an Affirmative Resolution every time the National Coal Board wish to engage in these activities, and have to put that Resolution through both Houses of Parliament, it is certain that foreigners will think that in some way or other the Government are mixed up in it. That would produce the very result which hon. Members opposite fear and criticise. But this will not happen if we do not have this extraordinary procedure.
This Amendment is a wrecking Amendment. It would be unfair to the National Coal Board to act upon it. In fact, if the Amendment were adopted, the Clause would mean nothing. I think I have given convincing reasons why it is desirable that Clause 2 should be passed. Those reasons are that I think it is fair to the National Coal Board, and is necessary to the British export trade, that we should give the Coal Board this freedom and not continue to hamper the Board as they are hampered at present. There is no need to fear that the National Coal Board are going to swamp all

British coal exporters. There is no suggestion that they are going to set up a monopoly in exporting coal abroad; but we do say that they should have sufficient freedom to carry on export trade and so benefit the country.

Mr. Bracken: I must say that we on this side of the House are profoundly disappointed and perturbed by the Minister's speech. Not long ago the Minister made some very sensible remarks about the supreme crisis which threatens Britain today. I say the remarks were sensible because I entirely agree with him. I said the same thing, in more moderate language, three weeks before he made his speech, and was then admonished by the "Daily Herald" and other Socialists as being one of those gentlemen who wanted to sabotage Britain's credit abroad. Now, here is the Minister's way of dealing with this supreme crisis. It is to encourage the National Coal Board to supplant old-established and very well-managed coal exporters situate in many parts of the world; and lest hon. Members on the other side think that these firms are making a tremendous profit out of acting as agents for the Coal Board, let me tell hon. Members that the maximum profit they earn is sixpence a ton.

Mr. Edward Porter: What is the total amount?

Mr. Bracken: Our colleague of the Gas Committee has done us a great service by his interruption. We should love the Minister to ask that question, but he refuses to give any information about the doings of his nominees on the Coal Board. I happen to know many of these exporters in parts of the world which I have to visit. They are in competition with Poles and many other coal exporters. They are also in the oil business, and if they lose their coal business, because the Coal Board refuse to supply them, or just supplants them, then we shall lose a lot of hard currency which, heaven knows, is what we are supposed to need so much today and which is vital to our existence. If the Minister really believes that we are in a supreme national crisis, he should not deprive us of foreign currency merely because the National Coal Board want to have more powers.
I think that he gave an explanation which, if I may say so, was rather offensive to the intelligence of the House. He said that the Board must be allowed to


establish offices in Europe. Well, Britain is still in Europe, and the Coal Board has the largest offices, almost, in London; vast buildings overlooking Buckingham Palace. Later on, he made reference to Paris. But if they are to establish offices in Europe, they will have to go to something like 18 or 19 countries. I should have thought, as do my hon. Friends, that the Coal Board would have been better occupied in producing coal than in entering into new ventures abroad.
Why do the Board think that, overnight, they can establish a first-rate selling organisation? I should have thought that the complaints by the miners about the mismanagement of the Coal Board, and the neglect of their domestic concerns, affecting some 600,000 or 700,000 miners, would have given the Coal Board food for thought. I suppose that some members of the Board visit the mines sometimes; but they want now to set up new offices all over Europe, spending the taxpayers' money to set up a selling organisation which is to compete with well-established selling organisations, established by Britons for more than a century. Now the Minister, as part of his handling of this supreme crisis, is going to injure Britain abroad, and is going to add to the losses which the Coal Board will make at home.
10.45 p.m.
I have listened, as we have all listened, to the wailings of Lord Hyndley about the failure to reach the target of coal production in Britain. The Minister himself rightly complained of that failure. But does anyone believe that the Coal Board, having failed in their expectations at home, can really do very much good in setting-up overnight a lavish distributing organisation abroad? The Minister skated over a statement made by one of his colleagues in another place, a statement which was of great importance. I now refer to Lord Macdonald's declaration. Lord Macdonald claimed that the Coal Board should be given the opportunity to sink mines abroad. He said so, and that statement will not, I think, lead to much applause from mining Members in this House. But that was the declaration of policy he made on behalf of His Majesty's Government and it was not repudiated by the Minister.
I cannot imagine anything more serious than the Coal Board, who are absolutely overwhelmed by problems at home, setting out to sink mines abroad. I cannot imagine a more defeatist approach to coal production in England. Is the message to go out from this House, through Lord Macdonald and the Minister, that, having despaired of getting a fair supply of coal at home, the Government are going to sink mines abroad to provide the British public with coal? That is a good approach to the crisis that afflicts Britain at the present time.

Mr. Blyton: Will the right hon. Gentleman tell me why the Powell Duffryn Company are now seeking to exploit the Australian coalfields?

Mr. Bracken: First of all, they are not seeking to exploit the Australian coalfields, but if they are they have been invited to Queensland by an impeccable Socialist Government. I hope hon. Members opposite will put a stop to this non-sense of the Coal Board sinking shafts abroad in order to compete with British miners at home. Again one must say a word for the taxpayers. Are we to be asked to provide money to set up an elaborate organisation all over Europe and also to sink shafts in many countries? All I can say about that is that I hope indeed that the National Coal Board will not sink their shafts in Tanganyika. The Minister also told us that he thought that in certain circumstances the Coal Board should be in a position to dump coal abroad; that was his clear meaning, to sell under general world prices.

Mr. Gaitskell: The right hon. Gentleman really must not misrepresent me quite so much. What I said was they might find it desirable to stock coal abroad, not sell it, while there was difficulty in selling the coal so as to keep the pits running here. Does the right hon. Gentleman disagree with that?

Mr. Bracken: I never heard such an explanation. Are they stocking coal abroad without any intention of selling it abroad? Is that the Minister's idea? In addition to having salesmen in every capital in Europe and sinking mines in tropical Africa, he is apparently going to have large warehouses to stock the Coal Board's coal. We are indeed get-


ting into trouble under the régime of the right hon. Gentleman. He is talking to us tonight about the necessity for cheap coal, but the Coal Board have turned coal into black diamonds. We have pushed ourselves out of many markets and, as the Minister rightly said, we shall soon be faced with the most furious competition from Polish coal producers. I do not know what the Minister's information is, but I am told that the Poles next year may be able to export more than 40 million tons of coal. If they are able to export more than 40 million tons of coal, it is vitally necessary for the Coal Board to face up to this competition now and to clean up the mess which they have created in the industry. If anybody thinks that the industry is not in a mess, he ought to read the speeches of leading representatives of the National Union of Mineworkers.
The Minister also told us that he is going to spend money on selling organisations abroad and on warehouses abroad to contain the coal of the National Coal Board. But now he wants other powers. He wants to advertise British coal abroad. Imagine—advertise British coal abroad. Time after time we have heard the Foreign Secretary say, "If the miners will only give me more coal, a great many of my burdens will be removed," and yet we are told that the Coal Board will need money to advertise. British coal abroad. I would give the Minister advice in the form of an adaptation of words of Mrs. Beeton, "First produce your coal before you advertise it abroad."
We all agree that we are not getting a sufficient production of coal in Britain at the present moment. The Minister said so the other day, and the Prime Minister and the Chancellor of the Exchequer often say so, but the Coal Board, which have the responsibility, instead of concentrating on production, now want to wander into expensive adventures all over the world. I should have thought that at the present time the Coal Board had so many responsibilities that they would wish to have a system of devolution in their organisation and not wish to add greatly to their responsibilities. I should have thought that the Minister would have been the first to see that, because the Coal Board are one of the largest bureaucracies in England and one of the

most incompetent—and that is saying a great deal.
The Minister's peroration was a most remarkable one. He said that one of the reasons the Coal Board must set up organisations abroad was that many foreigners would not tolerate the British Government having coal depôts or warehouses in their countries.

Mr. Gaitskell: It is almost a shame to interrupt the right hon. Gentleman because his fantasies are so interesting, but really I did not say anything of the kind. What I said was that the Opposition frequently complained during the passage of this Bill that this would mean bringing the Government into the business of exporting coal. I explained that it would do nothing of the kind unless this Amendment were passed. If the Amendment were passed, it would tend to bring the Government into the business in the eyes of foreigners.

Mr. Bracken: The Minister has confirmed everything I have said. [Interruption.] Well, in fairness to the Minister, let us analyse his proposition. He says that the Government have no responsibility for the operations of the Coal Board abroad. However, every member of the Coal Board is appointed by the Minister and can be removed by the Minister. Furthermore, the Minister has power to give absolute directions to the Coal Board and they must obey his orders. Is any foreigner going to be taken in by the statement that the National Coal Board, which can be sacked by the Minister if they do not accept his directions, have nothing to do with the British Government? The right hon. Gentleman's capacity for disingenuousness is only equalled by his capacity to shed salt tears.
I have often listened to Ministerial defences in this House, but I have never heard a worse one than that put before us. Of course, we have only begun to consider this important matter. Many of my hon. Friends have far more experience of the coal industry than the Minister, the Coal Board, or even myself. They in due course will make their contribution to the Debate, but let me tell the Minister that unless his Parliamentary Secretary can put up a better case than he did, we are bound to divide against this Motion. As hon. Members


opposite realise, we are not, like them, marched like sheep through the Lobby. We shall state our arguments with the greatest gravity and I think that with the great force of those arguments we may be able to convert the Minister.

Mr. Blyton: I always get a good deal of pleasure from listening to the right hon. Member for Bournemouth (Mr. Bracken) because he is always so cheerful when he is unhappy. He has put the same case today as he did upstairs. I want to congratulate the Opposition on their fight in trying to protect the private interests in the export trade, the policy of their Tory friends in the other House, and the policy they tried to enforce upstairs.
The right hon. Member for Bournemouth said that exporters secured only 6d. a ton. I used to hew coal for 6d. a ton. I worked eight hours a day producing that in a very humid atmosphere, but the exporter can pick up a telephone and can say to a colliery, "I want 30,000 tons f.o.b. before such and such a day"—and 30,000 sixpences are earned by that process. I believe the hon. and gallant Member for East Grinstead (Colonel Clarke) knows of my activities in the area where his family was interested in the export of the product of the company for which I worked. We are told by the right hon. Member for Bournemouth that we must have more coal. I agree with that. We should have had more coal had not his hon. Friends ruined the pits by lack of mechanisation in the inter-war years.

Mr. Bracken: The only coalowner I think I have known among my friends happens to be a member of the party opposite.

Mr. Blyton: I can tell the right hon. Member of one thousand of them on the opposite side politically. I can assure him that Lord Gainford was never a member of the Socialist Party.

Mr. Bracken: He was a Liberal.

Mr. Blyton: He was a member of the Coal Board. I have never seen any difference between Liberals and Tories. Reference has been made to miners' complaints. We think that if something is wrong it should be put right, but let the

Opposition be under no illusion—the miners will never go back to the horrible system of private enterprise, to the private owners who treated them so cruelly in the inter-war years.
When we discussed upstairs this question of the export side, the hon. Member for Chippenham (Mr. Eccles), whose speeches I always enjoy, although I disagree with them, pleaded with the Committee that there would be no money in the export trade for the next 15 years. He may have told that tale to the marines, but he could not tell it to us on the Labour side. If there is to be no money in this for 15 years, why then are the Opposition fighting to retain it? Why have the Members of another place resurrected the matter, and tried to take away the powers of the National Coal Board? Why should the National Coal Board be denied powers to enter the export market, a market that private enterprise had when it ran the pits? My colliery company dealt with one exporting company, and that exporting company had its directors on the board of the colliery company. Although they showed a loss at the pit head and were receiving help from the State as a necessitous undertaking, they were making a handsome profit out of the export trade.

11.0 p.m.

Colonel Clarke: The hon. Gentleman and I have differed over this before. Under the ascertainment of the industry all miners had a right to appoint auditors to see that the coal was passed over at a fair price. Is the hon. Gentleman now suggesting that the auditors which he and his mates appointed did not do their job correctly? These auditors were all honourable men, and I have every faith in them, and believe they did their job properly. Why did not the hon. Gentleman look after them?

Mr. Blyton: Year after year we passed resolutions demanding that the miners should have the right to see the books because we always questioned whether the colliery companies were selling coal to themselves at fancy prices. What answer did we get? We were told by the auditor "I am a chartered accountant. These are the figures. That is how I found them." We had to take it or lump it. Why should the National Coal Board not have the same powers? I


believe this Bill has not gone far enough. The Government ought to have gone forward and taken the whole lot, and let the National Coal Board carry on the exporting side of the industry. I say to the Opposition that little fish are sweetest. They had far better take this, because if a miner ever gets on the Government Front Bench they will lose the lot.
It is necessary that the National Coal Board should have these powers. They will be a safety valve, as far as the industry is concerned, in the matter of the competition it will have to face not only from Poland but also, I believe, from Germany as that country increases its production. Are we to be put in the same position as we were in during 1920 and 1921, when coal was sold free on board at such a ridiculously low figure that we in the exporting district could only earn 6s. 6½d. a day in the pits? Or are we to have the exporting organisations of the National Coal Board to get a price which will guarantee a decent standard of living for the miners? [HON. MEMBERS: "How?"] Hon. Gentlemen may laugh, but I remember the argument about exporting.
We were told we would have wage reductions because they could not sell coal abroad at the price that was dictated. But the owners used to follow the same course, because they and the exporters were the same company. If it was found that the cost of timber went up, they bought it at the advanced price: if the cost of rails went up they were bought at the new price. The companies were forced by law to feed the ponies in the pits, and if the cost of feedingstuffs went up they had to find it. In the main they were able to pay the prices for raw materials, but they adopted a different type of reasoning and logic towards the men employed in the pits from that which they adopted in regard to the going. We are not going back to those days.
When we meet this competitive situation, I can visualise a position arising in which exporters can say to the National Coal Board: "You do as we tell you, or we will not sell your coal abroad." The N.C.B. could then be held to ransom. Why all the worry by hon. Members on the Opposition side of the House? They believe in competition: that is their argument. Why are they fearful that the

N.C.B. will enter the export market in competition with their own particular interest—private enterprise? The question is a very big and important one for the industry. The N.C.B. will enjoy the same powers as private enterprise possesses. The N.C.B. are entering this market to ensure that in the years that lie ahead, in the difficult competitive market which we have to face, the young men in the pits today—and those whom we want to go into the pits—shall not receive the same ruthless exploitation as I received when I worked in the pits for 32 years.

Colonel Clarke: The hon. Member for Houghton-le-Spring (Mr. Blyton) has an immense respect for the N.C.B. He apparently imagines that it can make the world price for coal. That is ridiculous. If anyone makes the world price, it is the cheapest producer, which is probably Poland, and nothing in this Bill or the Amendment is going to alter that. I will not follow the hon. Member in one or two other things he said, but may come back to them later in my speech.
I would normally declare an interest, but that has been done for me by the Minister and one or two other hon. Members. At the same time, I want to view this matter dispassionately and from the point of view of whether, in present economic circumstances, the Bill as it stands, or the Bill with the Amendment proposed by another place, is likely to obtain the largest volume of export trade in coal at the best prices compatible with the maintenance of our goodwill in the trade. On the one hand, we have the existing method whereby coal is sold free on board by the N.C.B. to the exporting and bunkering companies. These companies and firms have years of continuous experience and long-established goodwill.
The Minister thinks, rightly, that there are in the N.C.B. men experienced in the export trade. I agree. Some of them were very able when they were engaged in the export trade. After the two years in which they have been out of it they might be able to stage a complete comeback, but there is a break in connection with foreign buyers and the foreign trade of some two years. Arising out of that, I want to ask a question. If the N.C.B. go into the export trade, will they have representatives permanently resident


abroad, as the coal export trade now has, or will they rely purely on commercial attaches? I do not want to say anything against commercial attaches, but that system is a very different thing from having men resident in the country, in touch with the coal importers, knowing the industry—perhaps having been engaged in it all their lives—and having personal and continual touch with and knowledge of the trade. Which of the two is likely to be the more successful—a continuance of the present private firms, or alternatively a new set-up in which the N.C.B. also goes into the market, also sells coal to importers abroad, and deals directly with the foreign buyer?
There I would like to ask a second question. Apart from the large quantities to which the Minister has referred, would it be the intention of the Board to take over whole districts abroad, and trade with them as the private exporters trade now, that is, taking the small sales and the large sales alike, the easy business with the hard business, just as it comes; or is it their intention to take for themselves the large and easy bulk sales, possibly in conjunction with the international buying and selling of commodities, and to leave the small and difficult and "thin" sales—"thin" is a financial term—for the remaining exporters; in fact, to take the cream of the trade, and leave the rest to private enterprise, and even in some cases to subsidise freights to give the N.C.B. a better opportunity?
I feel that much export trade will be lost. It is the fact of having the large trade that enables the small trade to be done. If they are divorced it will be impossible to carry much of the small trade. I do not believe the private trader can do the small trade alone, any more than I believe the N.C.B. can at present do the large and small trade entirely themselves. If we want to sell every ton of coal we can, it would be much better to let the private exporters continue to do the whole of it. To swop horses as we are crossing the stream—and I mean by that that the sellers' market is turning into a buyers' market, in coal as in everything else—is very unwise.
In another place the reason given for resisting this Amendment was a very

different one. It was that there was a danger that the private exporter might abuse his position. I know there is not the slightest danger of that. I would like to say to the hon. Member who, I see, is rather amused at what I said, and who said that the private traders were afraid of competition, that apparently the Coal Board is equally afraid of competition when it comes to the point, according to what I read of the Debate in the other House.
I think this is a very good Amendment. There is a touch of genius in it. It is not intended to deal with single sales, as the Minister suggested, but to deal with changes in policy. It gives all the necessary powers, and at the same time provides a safeguard against those powers being abused, or being invoked without due consideration. Otherwise there may be a danger that, for the prospect of a purely transient and small financial gain, much of the future prosperity of the coal export trade might be risked. I suggest that at this time we cannot afford to risk what has been in the past, and can be in the future, one of our most valuable export trades. I hope the Minister will think it over and will have a change of heart and a last-minute repentance.

11.15 p.m.

Mr. John Foster: The hon. Member for Houghton-le-Spring (Mr. Blyton) made obviously a very sincere speech, and he threw some light on why the Socialist Party have involved us in an economic crisis. He seemed totally unaware of the fact that the export price is not fixed by the National Coal Board but by world conditions, and his whole argument was based on that fallacy. He said about competition that private enterprise would be frightened. They are not frightened of competition, but they are frightened that the National Coal Board will pour the taxpayers' money into subsidising coal exports if they are allowed to do so. Of course, competition of that kind is not worth while, because we now know that when the activities of the National Coal Board are unremunerative, the loss falls on the taxpayers.
Why are we objecting to the National Coal Board entering the export trade? We are objecting to it because we do not believe that the National Coal Board can do the job properly or as well as it is done at present. The Minister may well remember the occasion of the Debate in


this House on the Coal Industry Bill, when he was very critical of the Report of the Fabian Society on the National Coal Board. He poured scorn on a body for which, I believe, he was a research worker. I do not know whether he will agree with that? He was not? I cannot see whether the right hon. Gentleman agrees or disagrees. [Interruption.] He disagrees. I understood that he was connected with that Society in some way—I see, but not in research. He was very touchy about the report of that Society. He should have looked at the first draft—he would have been very much more touchy. It was toned down for publication. The first report was much more critical of the National Coal Board.
If we look at the way the National Coal Board have worked the mines and exercised their relations with the miners, we see well that they have plenty of room to cure a lot of mistakes in other directions before they enter into another field of activity. The first objection, then, is that the National Coal Board at the moment have plenty to do to get their house in order before entering another field.
The second objection is that the National Coal Board will, in effect, be regarded as the British Government by other countries who will not enter into the sophistries and distinctions of the right hon. Gentleman as to whether the National Coal Board are or are not an organ of the Government. They might have this consolation, that if the law of the land abroad is the same as it is here, the National Coal Board in their advertising will be able to libel other people without being responsible for their actions. That may be one advantage, but apart from that, the foreign countries who are dealing with a government organisation exporting coal are apt, if there is a dispute, to put it on a diplomatic level. That is a great disadvantage for a nationalised industry entering into the export business.
In Cable and Wireless, one finds that the fact that the concessions are really Government concessions is camouflaged by the old companies being kept going. What is the reason for that? The reason is that it is thought that foreign countries would not like to deal with a government organisation in the field of telecommunications. In the field of the export industry, the moment a foreign

Government finds, say, that the National Coal Board are sending abroad the same kind of coal as it sells in this country—full of slate and slack—that Government will object, and the matter will be taken on a government level. That does not make for easy relations between the two countries. It is much better to leave breaches of contract, and objections by the buyers that the coal is not up to sample, or is not marketable, to the ordinary decision of commercial arbitration, or, in the last resort, to the law courts.
In trading abroad, the National Coal Board will find that they are, in a sense, representing the Government, pledging the credit of the Government, and the reputation of the Government for quality trade. And again, the National Coal Board will not be so critical of their own product. The exporter, in a sense, has an objective view. If he is given a quantity of coal which is not up to standard, he will react upon the Coal Board because he has his customers to think about. The exporting department of the National Coal Board will not be able to stand up to the production department of the National Coal Board in the same way. That is why what has been called profit, but is not profit namely, the 6d. a ton, is justified. I understand that the 6d. a ton is not anything like all profit. The profit is probably just under 1d. a ton. That is the information which I am given. I am told that the administration costs, the cost of selling coal and arranging all of that, come to just under 5d. a ton.

Mr. W. T. Williams: Say they are selling at a loss and have done with it.

Mr. Foster: That is a very different matter. For that 5d. the coal exporter performs a real service. It is the National Coal Board which have fixed, as I understand it, this margin of 6d. a ton. Are hon. Members on the other side of the House saying that the National Coal Board have fixed a margin of 6d. a ton which is not justified? Are they telling the House that the National Coal Board are anxious to put unmerited profits into the hands of coal exporters? I do not believe that that is so. I believe the National Coal Board in this instance have accurately costed the expense which agen-


cies have to meet out of that 6d. a ton, and have allowed the exporting houses a reasonable profit.
These are some of the reasons why we object to the National Coal Board entering the export field. Export should be, especially at this stage of our nation's affairs, carried out by the people who have experience in it, and who have done well in the export field. What is lacking is the coal. It is not skill in exporting which is lacking, but coal. I ask the House to get away from the economic fallacies of the hon. Member for Houghton-le-Spring. It is important at this stage that it should go out to the country, that the view that a Socialist welfare State can fix the export prices is entirely wrong. The reason for our troubles is that we are at the mercy, in our circumstances, of forces outside this country. We must see that we produce efficiently and economically, and that we produce the maximum of our main natural resource, namely, coal.

Mr. Tom Brown: I should not have intervened had it not been for one or two things said by hon. Members opposite. The question of the export trade in coal has always been a very sore problem. The hon. and gallant Member for East Grinstead (Colonel Clarke) referred very kindly, as he usually does, to what has been done by his own company. He referred to the continuation of the export trade in the coal industry being carried on by men who have some experience in the export of coal from Britain.
He also referred to the appointment of auditors during the period of ascertainment, and asked why we did not mention matters to the auditors. As my hon. Friend the Member for Houghton-le-Spring (Mr. Blyton) has said, time and time again we asked whether it was not possible to bring the revenue from the sales of exported coal into the ascertainment so that the miners' wages could be increased. I think my hon. Friend remembers the occasions. The hon. and gallant Member for East Grinstead knows full well, as do other hon. Members opposite, that we attempted from time to time to get that done.
Play has been made by Opposition Members of their claim that there is

very little to be made from the exporting of coal. What I cannot understand is why those hon. Members, and also Members of another place, can fight for the export of coal to be retained in private hands to the detriment of the Coal Board. There must be something in the export of coal and in the profit from it. Play has also been made of the 6d. a ton, but there is a book by a well-known coal factor, with great experience in the exporting of coal after the 1914–18 war, from which one will see who was responsible for bringing down the miners' wages, not only in the exporting districts—the greatest of which was South Wales—but elsewhere.
This "carry on" was done by people responsible for fixing prices and responsible for exporting coal from this country. I was in a county which produced coal for inland consumption, and I remember that I walked the streets for nine months because we could not get the prices which would give a decent standard of life to those working in the pits. Time and time again we appealed. It was a great day for me when I met a former Prime Minister of Britain—the late David Lloyd George. I was responsible, with my colleagues, in 1922, for calling his attention to the rot which had set in in the coal industry because of the mixing up of export prices. It was ruining the mining industry. Yet, we have today in this House hon. Members of the Opposition, as well as those in another place, who are trying to retain and hold down the export of trade in coal from this country. It will never pay the mining industry to retain it in private hands as in days gone by.
11.30 p.m.
I know full well, and hon. Members opposite who are putting up a fight for the export trade to be retained in private hands, should know, that no success will come to the mining industry until this trade is taken out of private hands and placed with the Coal Board. We are asking for nothing unreasonable. We are not asking for something that is impossible. All that we are asking, as the hon. Member for Houghton-le-Spring said, is that the National Coal Board who are now working the mining industry of this country shall enjoy the same rights and privileges as have been held by the owners of coal in days past. Nothing more, nothing less. I assure


hon. and right hon. Gentlemen opposite that we on this side of the House, having had to pass through the bitter experience of under-employment, unemployment, and starvation wages, will never be a party to the retention of the export trade of the mining industry by private enterprise.

Colonel Lancaster: ; The hon. Member for Ince (Mr. T. Brown) made a somewhat different case in opposition to the Amendment from that made by the Minister. What, in substance, the Member for Ince said was that we shall never get prosperity in the coal trade until the export of coal is taken out of the hands of private exporters; that the margin on which these exporters are operating is obviously greater than the one to which reference has been made, and that indeed there must be something very good to be had out of it, and why should not the National Coal Board step into the market and have what is going?
That is not what I understood the Minister to say. What he said was that it was unreasonable to deny to the National Coal Board the right to have offices, or an office, on the Continent and facilities for dealing with this problem of export should the occasion arise when it was in the national interest so to do. I must assume he is considering the draught of hot air which is coming in this direction from Silesia and Westphalia and is of opinion that our exporters will not be able to compete at the level at which coal at this moment is being sold to the exporters.
In fact, what the Minister is asking for is power to be in a position to subsidise our export trade. However much he wrapped this up in a number of reasons, I cannot for the life of me see that there would be any purpose in asking for this power if that were not the reason behind the Government's intention. Obviously, if the exporters at this moment are doing their job efficiently and the margin on which they are operating is one which is satisfactory to the Government, there would be no great advantage in the National Coal Board stepping into this market. I do not think for a moment that the Minister suggests that is a reason. What, in fact, the Minister is saying is, "I see difficulties ahead, I want the power and the opportunity to

deal with that problem when and if it arises."
I think that introduces a very considerable change of policy in regard to the sale of coal. We have been living in a sellers' market, but we are approaching, as the Minister very appropriately warned us, a buyers' market in commodities, and at this moment we have to make a very real decision. I do not myself feel we should be wise to give this power to the Government at this moment. It is not that I wish to hinder the export of coal from this country, and certainly I have no sort of connection with any exporting firm. What I feel to be wholly undesirable is that we should be subsidising the export of coal.
There is only one way to deal with that problem, and it is to produce coal at a price in this country which will enable us to compete against foreign competition. We saw all the difficulties which arose between the wars, and certainly between the years 1930 and 1935, when foreign exports were being subsidised as against British exports. It produced a most unhealthy international situation. Fortunately, towards the end of that period we were seeing some solution, but the solution did not lie in our attempting to under-subsidise the subsidies of foreign governments. On this occasion it is not going to be a question of our under-subsidising foreign subsidies. It is our inability to compete on a level with foreign producing costs, and an attempt to get round this by the method which is inherent in the suggestion in the Government's Clause is, I feel, something which the House cannot take lightly.
I fully agree with the various reasons which my hon. Friend the Member for Northwich (Mr. J. Foster) has advanced in regard to the intervention of Government agencies in general. They were all very sound reasons, but far and away more important than those individual reasons is the principle of the general subsidy of the export trade in coal. Until we have had a more satisfactory reason from the Government, possibly from the Parliamentary Secretary, of the intentions behind the decision of the Government to turn down the Lords Amendment, the Opposition would be most unwise to agree to the Motion.

Mr. Pryde: Discussions on coal are always very interesting. Tonight, with one eye on the clock, one is bound to think of Robert Burns' "Tam o' Shanter." When the right hon. Gentleman the Member for Bournemouth (Mr. Bracken) spoke, I was reminded of another hon. Gentleman who once sat in this House, John S. Clarke, who represented the Maryhill Division of Glasgow. He once wrote a book of poems, one of which was called "The Devil's Dilemma." The right hon. Member for Bournemouth reminded me of his satanic majesty when he received the imp who was sent to tell him of the world revolt. His Satanic majesty said:
How now,' hissed he, as the imp appeared,
'What news do you bring me love?
Down here, I guess, there's the devil of a mess.
What on earth is it like above?'
His description of the National Coal Board reminded me of that poem. I would remind the right hon. Gentleman that long before the National Coal Board took over, the coal industry was in the "devil of a mess."
Tonight the Opposition have clearly demonstrated that they have no case. Not even the brilliant legal intellect of the hon. Member for Northwich (Mr. J. Foster) could build a case for them on this occasion any more than it could when we discussed this aspect upstairs. The hon. and gallant Member for East Grinstead (Colonel Clarke) on that occasion referred to the auditors who worked at that time for the Miners' Federation of Great Britain, and he referred to them again tonight. On that occasion he mentioned a speech by my hon. Friend the Member for Houghton-le-Spring (Mr. Blyton) and referred him to variations in prices. If he studies the evidence submitted and admitted before the Samuel Commission, he will find that Mr. Gordon, of Mann, Judd and Gordon, in contradiction to Sir Thomas McLintock, of Thomson McLintock and Company, who worked for the coalowners on that occasion, pointed out that variations in prices were as high as 2s. 6d. per ton on coal sold by the coal companies to themselves by means of their selling agencies.
In Scotland it reached such a pitch that the wages of Scottish miners never rose above 10s. a day during the war years 1914–18. Anything else we got was

by way of bonus, flat rate, etc. But the selling price of coal abroad did not remain level. It rose to such an extent that this country lost the Italian market and we have never regained it. It is simply because export coal has remained in the hands of private enterprise that the coal industry in this country is in its present pass today.
Stripped of all the verbiage we have heard tonight, there are just two arguments; will we allow the product of the miners to be monopolised by certain private individuals for sale and distribution; or will we allow the N.C.B., the instrument nominated and guided by this House, the right to sell coal in the best interest and to the best advantage of the people of this country? I suggest to the House that the Opposition have advanced no case and that we must reinforce the Minister in his Motion to disagree with this Amendment.

Mr. Peter Roberts: We have had from three hon. Members on the other side arguments as to the profits of the distributive trade. Taking it at 1d. a ton for the moment and assuming that we export 24 million tons a year, that amounts to something like £100,000—and the hon. Member for Ince (Mr. T. Brown) said that until they get this, the National Coal Board will not be able to make a success of the industry. Does he really think that £100,000 will do that? If he does, I consider him to have made a speech which was not really worthy of what we have heard from him in the past. If the profit were 5d. out of 6d., it would amount to £500,000—and even so, it would not save the N.C.B. from the trouble that is coming to it.
The danger which I see in the arguments put forward from the back benches opposite is that of looking to the export trade to try to subsidise the Coal Board in some way. We had that point from the Minister himself when, talking about c.i.f. prices, he spoke of the possibility of subsidising the Coal Board from what I can only imagine to be shipping agencies.

Mr. Gaitskell: What I said was that the Coal Board might be prepared, because of their desire to hold a particular market, to take a greater risk about what the coal freight would be than a private firm would be willing to do. That is all. It is not by any means a subsidy. It is


simply a risk that a large undertaking interested in selling the product it produces itself might be willing to take.

Mr. Roberts: Surely the point is that if the Coal Board wish to do that, they can reduce slightly the price of their coal to the consumer. That would be straightforward accounting and it could be understood when the accounts were produced. But if this is some form of hidden subsidy, there is a danger and it is no good argument for disagreeing with this Amendment.
The second point I should like to make is about the suggestion of the wonderful sellers that the Minister has in the Coal Board, sellers who can go and do all this work and set up this organisation. May I remind him that, in regard to the sale of the product of the coke ovens, it is a matter of allocation by the Ministry of Fuel and Power. We have had a very successful example of their working in that respect this Summer. We hear from hon. Members opposite that this power must be in the hands of the Coal Board in the national interest of the people. We need to get exports of coke, well in advance of the Summer, into Scandinavia and other countries; but it was not until the Summer was well upon us that the Ministry woke up to the difficulties in selling coke abroad—and only then did they look for markets in Scandinavia.
It does not seem to me that the Minister can claim that the people in the Ministry, or he himself with all his responsibility, are going to do anything better in the interests of the people than those who are doing the job at the present time. That claim does not impress me much as an argument for disagreeing with the Amendment.
11.45 p.m.
We have heard a great deal about competition. I am all for competition. I have no interest in any selling agencies abroad. But what is the Minister's suggestion? He is going to open up new wharves where they have not been opened up before. When it becomes difficult to sell coal abroad, what is going to happen? Obviously the National Coal Board will tend to supply their own wharves at the expense of those that have been there in the past. I am not particularly worried about the ones that have been there in the past, but it does

not seem to me to be an economic way of dealing with the matter to set up an organisation to kill the original one.
There was, I think, something in the fourth point the Minister mentioned, which was that he might have to find some way of getting around the question of patents abroad. But he does not need this sledgehammer to deal with that matter. I give this warning to him. Maybe people abroad do not consider the National Coal Board are working for the Government. This principle was first started by Dr. Schacht in Germany; it has been followed by the Minister of Food and answered effectively by Mr. Peron of Argentina. This will be answered by other countries, and we may be starting something here in a small Amendment to a small Bill which can lead to other countries and economies in the world turning upon us.
The Minister should think again carefully before bringing this suggestion to the House. I consider that he has not made out his case. The only case that has been made out has been made by his hon. Friends behind him, who have said "We want the export trade for the profits there are in it." If that is so, let the Minister say so, but I can say that the profits will not be very high. We have heard some argument about the coke ovens and the profits that were going to be obtained from them. I ask what has happened to the profits from the coke ovens of the National Coal Board? I suggest the majority have turned to losses in the last three years. I hope we shall get some accounts to show what has happened to these hidden profits that were talked about so glibly. I think we shall find they are phantoms of the imagination. There is no good reason for destroying something which we have in this country in the present export organisation for some mirage which will disappear into the mists.

Mr. R. S. Hudson: We have had a comparatively short discussion on this Amendment, and it has been notable for the fact that no valid argument has been adduced from the Labour benches. Of what did the Minister's speech consist? It consisted of a statement that the National Coal Board might want to do this, that or the other thing. In other words, we were being asked to give a blank cheque to the National Coal


Board to do this, that or the other in overseas markets. No single case was presented by the Minister in any detail giving reasons why the National Coal Board might possibly want to do this, that or the other.
The only specific instance given by the Minister, and he did not give any name, was where he said that the National Coal Board had lost an opportunity for getting a patent abroad. Quite frankly and bluntly, we would like to hear details before we accept the Minister's word for that. In another place, the noble Lord who represented the Government in this matter quoted a case in which he alleged that British exporters had done their best to ruin the export prospects of the National Coal Board. When challenged by members on the Opposition side, he was completely unable to substantiate the accusation he made about patents in Ireland. I and my hon. Friends are not prepared to regard this one mythical case about the loss of a patent as valid unless we have full particulars.
Hon. Members behind the Minister have used arguments dating from before the war, when the situation was entirely different. We were then dealing with conditions in which this country was exporting up to 50 million tons of coal in a year. We are dealing now with a situation in which the National Coal Board is failing lamentably to achieve the miserable targets set for home and export—set not by any independent person assessing the real needs of the country but set by themselves, set by Lord Hyndley. He confesses, and so does the Minister, that even those targets are not being met and that the export trade is at present in a wholly artificial state.
The Minister said that the N.C.B. needed these powers in order to be able to quote c.i.f. prices slightly below the f.o.b. prices plus freight and insurance. There is nothing today which prevents the N.C.B., if they want to quote keener prices, from lowering the wholly artificial prices they are charging to the export trade—25s. a ton above what the domestic consumer is asked to pay.
If the Minister is asking for these wide powers against the day when the N.C.B. will have difficulty in getting export orders because of these excessive prices,

as may well happen—and about which many warnings have been issued not only by hon. Members on this side but by members of the Socialist Party preaching up and down the country—then his proposal is for nothing more than a concealed export subsidy. Everyone knows, or ought to know, that concealed export subsidies are one of the things that this country in international agreements has undertaken not to allow and not to use; the Minister is asking for powers to do something in respect of exports which another Government Department has agreed not to do.
The effect of the Clause is to give a free hand to the N.C.B. to do what seems best. If the N.C.B. had been an outstanding success, there might be something to be said for that. If they had succeeded—as many of their members know they ought to succeed—in reducing costs and prices, for example, there might be something to be said for giving this authority. If the N.C.B. had succeeded in getting an output from the mines adequate for the increasing needs of the country and for the domestic consumer to get as much coal as he required, there might be something to be said for giving this free hand. Whatever tests of success one applies, the Coal Board have failed.
Now the Minister comes along and says, not only that he wants these wide powers for export, but, having failed to produce coal in this country at a reasonable price, he wants the House to give the N.C.B. power to sink mines abroad. He very prudently did not say anything about that tonight, but the cat was let out of the bag by his noble friend in another place, for the first time I think, that one of the things contemplated under this Clause was that the Coal Board could sink mines abroad, and he was naive enough to say that nobody would think they would sink mines abroad unless it were in the national interest. The right hon. Gentleman may think that; the noble Lord may think that; but I can assure him that nobody on this side believes it, and that decreasing numbers of people in the country believe it.

Question put, "That this House doth disagree with the Lords in the said Amendment."

The House divided: Ayes, 167; Noes, 84.

Division No. 209.]
AYES
[9.53 p.m.


Acland, Sir Richard
Evans, S. N. (Wednesbury)
Lavers, S.


Adams, Richard (Balham)
Ewart, R.
Lewis, T. (Southampton)


Albu, A. H.
Fairhurst, F.
Lindgren, G. S.


Allen, A C. (Bosworth)
Farthing, W. J.
Lipson, D. L.


Allen, Scholefield (Crewe)
Field, Capt. W. J.
Logan, D. G.


Alpass, J. H.
Foot, M. M.
Longden, F.


Austin, H. Lewis
Forman, J. C.
Lyne, A. W.


Awbery, S. S.
Fraser, T. (Hamilton)
McAdam, W.


Ayles, W. H.
Gaitskell, Rt. Hon. H. T. N.
McEntee, V. La T.


Bacon, Miss A.
Ganley, Mrs. C. S.
McGhee, H. G.


Balfour, A.
Gibbins, J.
McKay, J. (Wallsend)


Barstow, P. G.
Gibson, C. W.
McKinlay, A. S.


Barton, C.
Gilzean, A.
Maclean, N. (Govan)


Battley, J. R.
Glanville, J. E. (Consett)
McLeavy, F.


Bechervaise, A. E.
Gooch, E. G.
MacMillan, M. K. (Western Isles)


Benson, G.
Goodrich, H. E.
MacPherson, Malcolm (Stirling)


Berry, H.
Gordon-Walker, P. C.
Mainwaring, W. H.


Bing, G. H. C.
Greenwood, A. W. J. (Heywood)
Mallalieu, J. P. W. (Huddersfield)


Binns, J.
Grenfell, D. R.
Mann, Mrs. J.


Blenkinsop, A.
Grey, C. F.
Manning, C. (Camberwell, N.)


Blyton, W. R.
Grierson, E.
Manning, Mrs. L. (Epping)


Boardman, H.
Griffiths, D. (Rother Valley)
Marquand, Rt. Hon. H. A.


Bowden, Flg. Offr. H. W.
Griffiths, Rt. Hon. J. (Llanelly)
Mathers, Rt. Hon. George


Braddock, Mrs. E. M. (L'pl. Exch'ge)
Griffiths, W. D. (Moss Side)
Messer, F.


Bramall, E. A.
Guy, W. H.
Middleton, Mrs. L.


Brook, D. (Halifax)
Haire, John E. (Wycombe)
Millington, Wing-Comdr. E. R.


Brooks, T. J. (Rothwell)
Hamilton, Lieut.-Col. R.
Mitchison, G. R.


Broughton, Dr. A. D. D.
Hannan, W. (Maryhill)
Moody, A. S.


Brown, George (Belper)
Hardy, E. A.
Morley, R.


Brown, T. J. (Ince)
Harrison, J.
Morris, P. (Swansea, W.)


Burke, W. A.
Hastings, Dr. Somerville
Mort, D. L.


Butler, H. W. (Hackney, S.)
Henderson, Joseph (Ardwick)
Moyle, A.


Carmichael, James
Herbison, Miss M.
Nally, W.


Champion, A. J.
Hewitson, Capt. M.
Naylor, T. E.


Chetwynd, G. R.
Hobson, C. R.
Neal, H. (Claycross)


Cobb, F. A.
Holman, P.
Nichol, Mrs. M. E. (Bradford, N.)


Cocks, F. S.
Holmes, H. E. (Hemsworth)
Nicholls, H. R. (Stratford)


Coldrick, W.
Horabin, T. L.
Noel-Buxton, Lady


Collick, P.
Houghton, A. L. N. D.
Oldfield, W. H.


Collindridge, F.
Hoy, J.
Paget, R. T.


Collins, V. J.
Hudson, J. H. (Ealing, W.)
Paling, Rt. Hon. Wilfred (Wentworth)


Colman, Miss G. M.
Hughes, Hector (Aberdeen, N.)
Paling, Will T. (Dewsbury)


Cooper, G.
Hynd, H. (Hackney, C.)
Palmer, A. M. F.


Corbet, Mrs. F. K. (Camb'well, N. W.)
Isaacs, Rt. Hon. G. A.
Pargiter, G. A.


Crossman, R. H. S.
Janner, B.
Parkin, B. T.


Cullen, Mrs.
Jeger, G. (Winchester)
Paton, Mrs. F. (Rushcliffe)


Daggar, G.
Jeger, Dr. S. W. (St. Pancras, S. E.)
Paton, J. (Norwich)


Davies, Edward (Burslem)
Jenkins, R. H.
Pearson, A.


Davies, S. O. (Merthyr)
John, W.
Peart, T. F.


Deer, G.
Jones, D. T. (Hartlepaol)
Popplewell, E.


Delargy, H. J.
Jones, Elwyn (Plaistow)
Porter, F. (Warrington)


Diamond, J.
Jones, P. Asterley (Hitchin)
Porter, G. (Leeds)


Dobbie, W.
Keenan, W.
Price, M. Philips


Donovan, T.
Kenyon, C.
Proctor, W. T.


Dumpleton, C. W.
Kinghorn, Sqn.-Ldr. E.
Pryde, D. J.


Ede, Rt. Hon. J. C.
Kinley, J.
Pursey, Comdr. H.


Edwards, W. J. (Whitechapel)
Lang, G.
Randall, H. E.




Rankin, J.
Smith, S. H. (Hull, S. W.)
Wheatley, Rt. Hon. John (Edinb'gh, E.)


Reeves, J.
Sorensen, R. W.
Whiteley, Rt. Hon. W.


Reid, T. (Swindon)
Soskice, Rt. Hon. Sir Frank
Wigg, George


Rhodes, H.
Sparks, J. A.
Wilkins, W. A.


Ridealgh, Mrs. M.
Steele, T.
Willey, O. G. (Cleveland)


Robens, A.
Stross, Dr. B.
Williams, D. J. (Neath)


Roberts, Goronwy (Caernarvonshire)
Stubbs, A. E.
Williams, J. L. (Kelvingrove)


Robinson, Kenneth (St. Pancras, N.)
Sylvester, G. O.
Williams, Ronald (Wigan)


Ross, William (Kilmarnock)
Taylor, R. J. (Morpeth)
Williams, Rt. Hon. T. (Don Valley)


Royle, C.
Thomas, D. E. (Aberdare)
Williams, W. T. (Hammersmith, S.)


Sargood, R.
Thomas, I. O. (Wrekin)
Williams, W. R. (Heston)


Scollan, T.
Thorneycroft, Harry (Clayton)
Willis, E.


Sharp, Granville
Thurtle, Ernest
Wise, Major F. J.


Shawcross, C. N. (Widnes)
Titterington, M. F.
Woodburn, Rt. Hon. A.


Shawcross, Rt. Hn. Sir H. (St. Helens)
Tolley, L.
Woods, G. S.


Shurmer, P.
Viant, S. P.
Yates, V. F.


Silverman, J. (Erdington)
Wallace, H. W. (Walthamstow, E.)
Zilliacus, K.


Simmons, C. J.
Warbey, W. N.



Skeffington, A. M.
Watson, W. M.
TELLERS FOR THE AYES:


Skinnard, F. W.
Webb, M. (Bradford, C.)
Mr. Snow and


Smith, C. (Colchester)
Wells, W. T. (Walsall)
Mr. George Wallace.


Smith, Ellis (Stoke)
West, D. G.





NOES


Agnew, Cmdr. P. G.
Gomme-Duncan, Col. A.
Peto, Brig. C. H. M.


Amory, D. Heathcoat
Grimston, R. V.
Pickthorn, K.


Astor, Hon. M.
Harvey, Air-Comdre. A. V.
Price-White, Lt.-Col. D.


Baldwin, A. E.
Headlam, Lieut.-Col. Rt. Hon. Sir C.
Prior-Palmer, Brig, O.


Barlow, Sir J.
Henderson, John (Cathcart)
Ramsay, Maj. S.


Bennett, Sir P.
Hogg, Hon. Q.
Rayner, Brig. R.


Birch, Nigel
Hope, Lord J.
Roberts, H. (Handsworth)


Boles, Lt.-Col. D. C. (Wells)
Howard, Hon. A.
Roberts, P. G. (Ecclesall)


Bowen, R.
Hudson, Rt Hon. R. S. (Southport)
Roberts, W. (Cumberland, N.)


Bower, N.
Hurd, A.
Robertson, Sir D. (Streatham)


Boyd-Carpenter, J. A.
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Sanderson, Sir F.


Bracken, Rt. Hon. Brendan
Jeffreys, General Sir G.
Scott, Lord W.


Buchan-Hepburn, P. G. T.
Joynson-Hicks, Hon. L. W.
Shepherd, W. S. (Bucklow)


Carson, E.
Kerr, Sir J. Graham
Snadden, W. M.


Challen, C.
Lancaster, Col. C. G.
Spearman, A. C. M.


Channon, H.
Law, Rt. Hon. R. K.
Stoddart-Scott, Col. M.


Clarke, Col. R. S.
Lloyd, Selwyn (Wirral)
Strauss, Henry (English Universities)


Conant, Maj. R. J. E.
Low, A. R. W.
Studholme, H. G.


Corbett, Lieut.-Col. U. (Ludlow)
Lucas-Tooth, Sir H.
Teeling, William


Crookshank, Capt. Rt. Hon. H. F. C.
MacAndrew, Col. Sir C.
Turton, R. H.


Crosthwaite-Eyre, Col. O. E.
McCallum, Maj. D.
Vane, W. M. F.


Crowder, Capt. John E.
McCorquodale, Rt. Hon. M. S.
Walker-Smith, D.


Cuthbert, W. N.
McFarlane, C. S.
Ward, Hon. G. R.


Digby, Simon Wingfield
McKie, J. H. (Galloway)
White, Sir D. (Fareham)


Dodds-Parker, A. D.
Maclay, Hon. J. S.
Williams, C. (Torquay)


Dower, Col. A. V. G. (Penrith)
Maitland, Comdr. J. W.
Williams, Gerald (Tonbridge)


Drewe, C.
Manningham-Buller, R. E.
Willoughby de Eresby, Lord


Erroll, F. J.
Marshall, D. (Bodmin)
York, C.


Foster, J. G. (Northwich)
Mellor, Sir J.
Young, Sir A. S. L. (Partick)


Fraser, H. C. P. (Stone)
Morrison, Maj. J. G. (Salisbury)



Fraser, Sir I. (Lonsdale)
Morrison, Rt. Hon. W. S. (Cirencester)
TELLERS FOR THE NOES:


Galbraith, Cmdr T. D. (Pollok)
Nicholson, G.
Brigadier Mackeson and


Galbraith, T. G. D. (Hillhead)
Nield, B. (Chester)
Colonel Wheatley.


George, Maj. Rt. Hn. G. Lloyd (P'ke)
Noble, Comdr. A. H. P.



Question put, and agreed to.

Division No. 210.]
AYES
[11.58 p.m.


Adams, Richard (Balham)
Guy, W. H.
Paton, J. (Norwich)


Albu, A. H.
Haire, John E. (Wycombe)
Pearson, A.


Allen, A. C. (Bosworth)
Hardy, E. A.
Popplewell, E.


Allen, Scholefield (Crewe)
Henderson, Rt. Hn. A. (Kingswinford)
Porter, E. (Warrington)


Austin, H. Lewis
Henderson, Joseph (Ardwick)
Price, M. Philips


Awbery, S. S.
Herbison, Miss M.
Proctor, W. T.


Bacon, Miss A.
Hewitson, Capt. M.
Pryde, D. J.


Baird, J.
Hobson, C. R.
Pursey, Comdr. H.


Balfour, A.
Holman, P.
Randall, H. E.


Barton, C.
Holmes, H. E. (Hemsworth)
Rankin, J.


Bechervaise, A. E.
Horabin, T. L.
Reid, T. (Swindon)


Benson, G.
Houghton, A. L. N. D.
Rhodes, H.


Bing, G. H. C.
Hoy, J.
Robens, A.


Binns, J.
Hudson, J. H. (Ealing, W.)
Roberts, Goronwy (Caernarvonshire)


Blenkinsop, A.
Hughes, Hector (Aberdeen, N.)
Ross, William (Kilmarnock)


Blyton, W. R.
Hynd, H. (Hackney, C.)
Royle, C.


Boardman, H.
Janner, B.
Sargood, R.


Bowden, Fig. Offr. H. W.
Jeger, G. (Winchester)
Sharp, Granvilie


Braddock, Mrs. E. M. (L'pl, Exch'ge)
Jones, D. T. (Hartlepool)
Shawcross, Rt. Hn. Sir H. (St. Helens)


Broughton, Dr. A. D. D.
Jones, Elwyn (Plaistow)
Silverman, J. (Erdington)


Brown, George (Belper)
Jones, P. Asterley (Hitchin)
Simmons, C. J.


Brown, T. J. (Ince)
Keenan, W.
Skeffington, A. M.


Burke, W. A.
Kenyon, C.
Snow, J. W.


Butler, H. W. (Hackney, S.)
Kinghorn, Sqn.-Ldr. E.
Sorensen, R. W.


Carmichael, James
Kinley, J.
Soskice, Rt. Hon. Sir Frank


Coldrick, W.
Lang, G.
Sparks, J. A.


Collindridge, F.
Lavers, S.
Steele, T.


Collins, V. J.
Lewis, J. (Bolton)
Stewart, Michael (Fulham, E.)


Colman, Miss G. M.
Lindgren, G. S.
Stross, Dr. B.


Cook, T. F.
Logan, D. G.
Stubbs, A. E.


Corbet, Mrs. F. K. (Camb'well, N. W.)
Longden, F.
Sylvester, G. O.


Cullen, Mrs.
Lyne, A. W.
Taylor, R. J. (Morpeth)


Daggar, G.
McGhee, H. G.
Thomas, D. E. (Aberdare)


Davies, Edward (Burslem)
McKay, J. (Wallsend)
Thomas, I. O. (Wrekin)


Davies, Harold (Leek)
McKinlay, A. S.
Wallace, G. D. (Chislehurst)


Deer, G.
McLeavy, F.
Wallace, H. W. (Walthamstow, E.)


Dobbie, W.
MacMillan, M. K. (Western Isles)
Warbey, W. N.


Ede, Rt. Hon. J. C.
MacPherson, Malcolm (Stirling)
Watson, W. M.


Edwards, W. J. (Whitechapel)
Mallalieu, J. P. W. (Huddersfield)
Webb, M. (Bradford, C.)


Evans, S. N. (Wednesbury)
Mann, Mrs. J.
Wells, W. T. (Walsall)


Ewart, R.
Manning, Mrs. L. (Epping)
West, D. G.


Fairhurst, F.
Middleton, Mrs. L.
Wheatley, Rt. Hon. John (Edinb'gh, E.)


Farthing, W. J.
Millington, Wing-Comdr. E. R.
Whiteley, Rt. Hon. W.


Field, Capt. W. J.
Mitchison, G. R.
Wigg, George


Forman, J. C.
Monslow, W.
Willey, O. G. (Cleveland)


Fraser, T. (Hamilton)
Moody, A. S.
Williams, D. J. (Neath)


Gaitskell, Rt. Hon. H. T. N.
Morley, R.
Williams, J. L. (Kelvingrove)


Gibbins, J.
Morris, P. (Swansea, W.)
Williams, Ronald (Wigan)


Gibson, C. W.
Nally, W.
Williams, W. T. (Hammersmith, S.)


Gilzean, A.
Neal, H. (Claycross)
Williams, W. R. (Heston)


Glanville, J. E. (Consett)
Nichol, Mrs. M. E. (Bradford, N.)
Willis, E.


Gordon-Walker, P. C.
Nicholls, H. R. (Stratford)
Woodburn, Rt. Hon. A.


Greenwood, A. W. J. (Heywood)
Oldfield, W. H.
Woods, G. S.


Grey, C. F.
Paling, Rt. Hon. Wilfred (Wentworth)



Grierson, E.
Paling, Will T. (Dewsbury)
TELLERS FOR THE AYES:


Griffiths, D. (Rother Valley)
Palmer, A. M. F.
Mr. Hannan and Mr. Wilkins.


Griffiths, Rt. Hon. J. (Llanelly)
Paton, Mrs. F. (Rushcliffe)





NOES


Amory, D. Heathcoat
Dodds-Parker, A. D.
Hurd, A.


Astor, Hon. M.
Drewe, C.
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)


Baldwin, A. E.
Dugdale, Maj. Sir T. (Richmond)
Jeffreys, General Sir G.


Barlow, Sir J.
Foster, J. G. (Northwich)
Lancaster, Col. C. G.


Bennett, Sir P.
Fox, Sir G.
Lloyd, Selwyn (Wirral)


Birch, Nigel
Fraser, H. C. P. (Stone)
Low, A. R. W.


Boles, Lt.-Col. D. C. (Wells)
Fraser, Sir. (Lonsdale)
Lucas, Major Sir J.


Bowen, R.
Gage, C.
Lucas-Tooth, Sir H.


Bower, N.
Galbraith, Cmdr. T. D. (Pollok)
MacAndrew, Col. Sir C.


Boyd-Carpenter, J. A.
Galbraith, T. G. D. (Hillhead)
McCallum, Maj. D.


Bracken, Rt. Hon. Brendan
George, Maj. Rt. Hn. G. Lloyd (P'ke)
McCorquodale, Rt. Hon. M. S.


Buchan-Hepburn, P. G. T.
Gomme-Duncan, Col. A.
McFarlane, C. S.


Challen, C.
Grimston, R. V.
Macmillan, Rt. Hn. Harold (Bromley)


Channon, H.
Harvey, Air-Comdre. A. V.
Mailland, Comdr. J. W.


Clarke, Col. R. S.
Headlam, Lieut.-Col. Rt. Hon. Sir C.
Manningham-Buller, R. E.


Conant, Maj. R. J. E.
Henderson, John (Cathcart)
Mellor, Sir J.


Corbett, Lieut.-Col. U. (Ludlow)
Hogg, Hon. Q.
Morrison, Maj. J. G. (Salisbury)


Crookshank, Capt. Rt. Hon. H. F. C.
Hollis, M. C.
Morrison, Rt. Hon. W. S. (Cirencester)


Crosthwaite-Eyre, Col. O. E.
Hope, Lord J.
Nicholson, G.


Crowder, Capt. John E.
Howard, Hon. A.
Nield, B. (Chester)


Cuthbert, W. N.
Hudson, Rt. Hon. R. S. (Southport)
Noble, Comdr. A. H. P.







Peto, Brig. C. H. M.
Studholme, H. G.
Wheatley, Colonel M. J. (Dorset, E.)


Pickthorn, K.
Teeling, William
White, Sir. D. (Fareham)


Price-White, Lt.-Col. D.
Thomas, J. P. L. (Hereford)
Williams, C. (Torquay)


Ramsay, Maj. S.
Turton, R. H.
Willoughby de Eresby, Lord


Rayner, Brig. R.
Vane, W. M. F.
York, C.


Roberts, P. G. (Ecclesall)
Walker-Smith, D.



Stoddart-Scott, Col. M.
Ward, Hon. G. R.
TELLERS FOR THE NOES:


Straus, Henry (English Universities)
Webbe, Sir H. (Abbey)
Brigadier Mackeson and Mr Digby.

Clause 3.—(TERMINATION OF CERTAIN LONG-TERM CONTRACTS TRANSFERRED TO THE BOARD.)

Lords Amendment: In page 2, line 24, leave out "This section applies to provisions of any," and insert "Where a."

The Solicitor-General (Sir Frank Soskice): I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is one of a series of Amendments which are of a drafting character. The other Amendments which go with it are those at page 2, line 27; page 2, line 28; page 3, line 11, and page 3, line 14. They are designed to remove any doubt there may otherwise have been that all the provisions of the contract which vests in the Board under Section 7 of the Coal Industry (Nationalisation) Act, 1946, are to be repudiated if any of them are—in other words, that the Coal Board cannot pick and choose.

Mr. R. S. Hudson: These are little more than drafting Amendments. They meet a point made from this side of the House during the earlier stages about certain desirable alterations and clarifications. We are very grateful to the Government for accepting our views, even so tardily.

Question put, and agreed to.

Lords Amendment: In page 3, line 13, after "contract" insert:
whereto the parties were, immediately before the primary vesting date, not connected (whether directly or indirectly) with each other to any material extent apart from the contract; and in the case of a contract.

The Solicitor-General: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This, again, is one of a series of three Amendments, the other two being in page 3, lines 13 and 14. What these Amendments do is to provide that Clause 3 of the Bill is not to apply to a contract unless it can be shown that the parties to the contract before the National Coal Board came on the scene had some connection, one with the other, independently of the fact that they were con-

tractually bound together. There has to be some independent connection. This change is made in the provisions of the Bill in order to meet certain doubts which were felt by certain noble Lords with regard to the Clause. We agree that this Amendment improves the Clause.

Question put, and agreed to.

Lords Amendment: In page 3, line 45, at end, insert:
Provided that the Board shall not determine the operation of provisions of a contract on the ground only that the financial terms thereof, or any of them, are, or may become disadvantageous to them.

The Solicitor-General: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This, again, introduces a change which is somewhat analogous to the change made by the previous Amendment. It provides that Clause 3 shall not operate if the only thing which the Board complain of is that the Clause in question is financially disadvantageous to them. This change is made in the wording of the Bill to meet a point of view put by noble Lords.

Question put, and agreed to.

Lords Amendment: In page 4, line 21, after "question" insert:
whether provisions of a contract with respect to which the Board have served a notice under subsection (2) of this section are provisions to which this section applies or.

The Solicitor-General: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment goes closely with the Amendment in page 4, line 33, and perhaps I might explain the purpose of both at the same time. This Amendment is really designed to provide that the question whether the contract is one to which the Clause relates shall also be determined by the arbitrators in addition to the other matters which, as the Clause reads at the moment, are entrusted to them for determination. They will deal not only with the amount of compensation, but also with the question whether the contract is one within the purview of


the Clause. The second Amendment is really consequential on that. It provides that, in the event of the matter not having been determined by the arbitrators by the time the notice expires, the period for cancellation of the contract shall be proportionately put back.

Question put, and agreed to.

Clause 4.—(SUPERANNUATION, &C., RIGHTS.)

Lords Amendment: In page 5, line 16, at end, insert:
() The power conferred by paragraph (c) of subsection (1) of the said section thirty-seven to provide for the continuance, amendment or revocation of existing schemes or other arrangements for the provision of pensions, gratuities or other like benefits and of trust deeds, rules or other instruments made for the purposes thereof, and for the transfer or extinguishment of liabilities under, and the transfer or winding up of funds held for the purposes of, any such schemes or arrangements shall be exercisable in relation to schemes or other arrangements for the provision of such benefits in favour of—

(a) persons to whom subsection (2) of that section, as amended by this section, applies; and
(b) persons, other than as aforesaid, taken into the employment of the Board before the commencement of this Act, being persons who had been in employment in, or in connection with, coal industry activities or transferred allied activities;

or in favour of other persons by reference to the employment of such persons as aforesaid, to trust deeds, rules or other instruments made for the purposes of any such schemes or arrangements and to liabilities thereunder and funds held for the purposes thereof, but shall not be exercisable in relation to any other schemes or arrangements or instruments, liabilities or funds.

The Solicitor-General: I beg to move, "That this House doth agree with the Lords in the said Amendment."
The object of this Amendment is simply to cut down, or rather to clarify, the effect of a provision in Section 37 of the Coal Industry (Nationalisation) Act. It is subsection (1, c), and as it reads at present, it might enable—although that effect is not intended by the Government—compensation rights to be taken over in circumstances which are not approved. This Amendment cuts down the scope of this subsection, relating it more closely to the purpose which the Government have in mind. It provides that it can only be operated in connection with the persons set out in sub-paragraphs (a) and (b).

Mr. Charles Williams: There is one point about this Amendment. About five lines down, it turns to the matter of compensation. Before we agree with this Amendment, I think we should be quite sure that all the various unions who might have been interested in the matter have been consulted. We ought to know whether the Government have consulted those unions, so that we may be sure that all the miners, or anyone else affected, do not lose. If the matter has been gone into, they may be secure. There is a compensation system in the coalmining industry, which is well represented by hon. Members on the other side of the House, and it is well that the Tory Members should watch these matters as well.

Question put, and agreed to.

Lords Amendment: In page 5, line 41, leave out "as" and insert, "fair and reasonable."

The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. Robens): I beg to move, "That this House doth agree with the Lords in the said Amendment."
It will be within the recollection of the House that an hon. Member moved an Amendment to provide for arbitration in respect of certain persons concerned with pension rights, or expectations which they might have. We promised at that time, although that Amendment was rejected, that we would look into the point and, therefore, this Amendment has been produced.

Mr. J. Foster: Might I ask the Parliamentary Secretary whether he is satisfied that this Amendment applies to everybody covered by Section 37 (1) of the parent Act? I ask this because in the previous Amendment everybody is covered by subsection (2). Is there nobody who, having been employed in coalmining activities before the taking over, is rendered redundant? It is a most important point, because the Amendment refers to persons to whom Section 37 (2) applies. One will see in paragraph (a), of the previous Amendment:
…to whom subsection (2) of that section, as amended by this section, applies.…
Does that cover everybody who has been made redundant? Has everybody who is made redundant the right to benefits not


less advantageous? We think it is a matter of elementary justice that everybody should be covered.

12.15 a.m.

The Solicitor-General: The Clause relates to Section 37 (2) and I think that if the hon. Member will analyse the provisions of subsection (2), he will see that it includes those persons who are specified in sub-paragraphs (a) and (b) of subsection (1).

Question put, and agreed to.

Lords Amendment: In page 6, line 2, at end, insert:
and (in such cases and to such extent as may be specified in the regulations) taking into account, as regards the amount thereof, any loss of benefits which might have been expected to accrue by virtue of employment after the expiration of the period aforesaid.

Mr. Gaitskell: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment has been inserted to make clear that it was our intention that in assessing compensation for cesser of a person's expectation of pension, we had no intention of excluding that part of his expectation attributable to future service. It is true that in the Bill as originally drafted the reference in it, which was to guide the referee, was to the past emoluments and services of the individual. But we had never any intention, and I think I made that clear myself at an earlier stage, of disregarding all expectation of future advance and so on that there might be.
In point of fact, the schemes established by the National Coal Board did in suitable cases take into account the future expectation of the individual, and, of course, the same thing applies in comparable regulations for compensation made under the Electricity Act. We shall have to provide in the regulations for the conditions which are to apply in this matter. We cannot obviously in this Bill lay down exactly how a person's future service expectations are to be valued, the way they are to be taken into account, and so on. When the amended regulations are made, following this Bill, they will be subject to a negative Resolution. If the Opposition are dissatisfied then, they can put down a Prayer and we can have a full discussion on it. But it is my in-

tention that at the moment these regulations should follow, broadly speaking, what has been the practice of the Coal Board under their present scheme which in certain suitable cases takes into account the future service expectations and shall also follow the compensation regulations to the Electricity Act where a person's future expectations under certain specified conditions are taken into account.

Mr. R. S. Hudson: All I can say about the speech we have just listened to is it is a great pity the Minister did not make it in the course of the earlier proceedings. It is a pity he did not accept the Amendment which the Opposition put forward, designed to make the position clear. Those who were present during the Committee stage upstairs will remember that far from the Minister expressing the views he now puts forward, he definitely stated that although the original pledge under the nationalisation Act had been carried out, no pledge had been given that the Government would not introduce subsequently legislation to change that pledge.

Mr. Gaitskell: "Clarify" was the word I used.

Mr. R. S. Hudson: That is a nice distinction without a difference. The Solicitor-General went on to agree that in fact it was a distinction without a difference because he said, it will be remembered, that the result of this new scheme might well be that some people would benefit and others would suffer.
I am glad to say that, as a result of the Debate in another place, the Lord Chancellor saw fit to change the attitude of the Government. I am particularly concerned by the later statement which the Minister made about what his intentions were when he brought in the new regulations. The House will perhaps permit me to read the statement made by the Lord Chancellor. I hope that we can take it that the Minister proposes to carry out the pledge given by the Lord Chancellor in the course of discussions in another place, because I think it is only fair to everyone concerned that we should get a specific statement from the Minister concerned who will introduce the new regulations, that he agrees with, will be guided by and will fully implement the pledge given by the Lord Chancellor. In


column 640 of the OFFICIAL REPORT on Thursday, 12th May, he said:
I do not want to rule out"—

Mr. Gaitskell: On a point of Order, Mr. Speaker. I thought that it was out of Order to quote from the Proceedings of another place.

Mr. Speaker: Not when a Minister has special responsibility. It is in Order in the case of a Minister.

Mr. R. S. Hudson: It is a specific statement of policy about what the Government intend by these regulations. The Lord Chancellor said:
I do not want to rule out an expectation. I want these men to be compensated fairly and reasonably for everything they have lost, including their expectation.
That is very different from what the Minister said during the Debate in this House. In column 644, the Lord Chancellor said:
Frankly, it is not my intention here to do down any of these people.
During the discussions here, the Solicitor-General thought that some of these men might be done down. The Lord Chancellor said:
Frankly, it is not my intention here to do down any of these people. I think we can easily agree that the compensation a man should receive should be no less than he would have received if he had been dismissed by his old employer without the Coal Board having come into it.
I hope that before we conclude the proceedings here we shall get from the Minister or the Solicitor-General an assurance that the regulations submitted will carry out the pledge given by the Lord Chancellor.

Mr. Gaitskell: If I may reply by leave of the House, I really have nothing to add to what I have said already. I cannot see that a statement by my noble Friend the Lord Chancellor to the effect, for example, that a man would, he hoped, be treated as well as he would have been treated by a colliery company which dismissed him, is likely to cause us any serious embarrassment, because I think that the colliery company would have been very unlikely to have helped him at all in such a case. [HON. MEMBERS: "Oh."] The whole problem arises from interpreting precisely those particular phrases. How can we say here and now what a colliery company would have done? We cannot deal with it entirely on that basis.
I have said already that we shall make regulations. These will be debatable in the House if the Opposition wish to debate them, and so far as I can see at present—I do not want to go into detail tonight, for that would be impossible—they will follow broadly the present schemes of the National Coal Board, which, as far as I am aware, have been regarded as entirely satisfactory, and the regulations made under the Electricity Act. It would obviously be quite wrong to make compensation regulations for coal wholly different to those in respect of the electricity and transport or other nationalisation Acts. As for the details, I must ask hon. Members opposite to wait for the regulations themselves.

Mr. Speaker: May I clarify what I said just now? A statement of policy by a Minister in another place is quotable. It is, however, another matter when he makes a debating speech; that is not a statement of Government policy, and it should not really he quoted in this House.

Mr. R. S. Hudson: These two statements were made by the Lord Chancellor in another debate in order to explain that he was meeting the desires of the Opposition in these Amendments which were substituted for some earlier Amendments that the Opposition moved. These were designed by the Government to be put forward in order to carry out the desires expressed by the Opposition. The Lord Chancellor explained that in these words, and therefore I take it that we are entitled to ask the Minister whether he intends to stand by the words of the Lord Chancellor.

Mr. Speaker: It is difficult to decide whether a debating speech was a statement of policy, but we must not take those words as obiter dicta.

Mr. Bracken: The Lord Chancellor is a member of the Cabinet and was speaking for the Government. He is a very hard-working man: he has to do the work of many Ministers and he advises the Government on many Departmental matters. He speaks for the Government with an authority greater than that of the Minister because he is a member of the Cabinet. He has given a definite pledge. I do not know whether hon. Members opposite noticed that the Minister qualified that pledge. He said that "at the moment" he thought he could incorporate this pledge, but it is


not good enough. I do ask the Minister now to clarify this point.
A member of the Government and a member of the Cabinet has given a solemn assurance, and we are perfectly within our rights to ask the Minister whether he endorses that pledge. He can do so in the simplest of language. He can say "yes."
If there is to be more quibbling about compensation, the Minister can remove all doubts by reiterating the promise made by his senior colleague. If he is not prepared to do so, then we on this side of the House will certainly raise this matter again and this Government will appear as a strange spectacle to the world—that of the Lord Chancellor giving a solemn promise and the weeping and wailing Minister of Fuel and Power refusing to endorse a senior colleague. Why does he not say "yes"?

Mr. Gaitskell: There is nothing strange about the spectacle of the right hon. Gentleman once again completely misunderstanding the whole situation. It really is quite impossible for me to comment on two or three sentences extracted from what I certainly would not regard as being an important statement of policy made in another place. Furthermore, I have listened very carefully to what the right hon. Member for Southport (Mr. R. S. Hudson) said, and I can only repeat what I said a moment or two ago and I do not see that that gets us any further. We shall make these regulations. They will follow broadly the lines of the schemes now operated by the Coal Board and laid down in the Electricity regulations. The details can be considered later on, but I have no more to say on this subject now.

Mr. Foster: The right hon. Gentleman wanted to exclude what was said in another place and that was rather suspicious: he will not answer a straight question put by my right hon. Friend. Is he prepared to give an assurance in the same terms? Why is he not prepared to do so, because the regulations he has issued and the scheme he has prepared cut down compensation to very much less than any employer would give any dismissed employee—[Interruption.] They do—I have it here. I have studied a copy of the regulations and they cut it down to very much less, and the right hon.

Gentleman knows it. I cannot read the whole of the regulations, but here they are. They were issued on 8th December, 1948, and that is what the trouble has been about all along. It is why the Minister makes his debating point.
12.30 a.m.
Is it an answer to the question whether he is prepared to give the same compensation as a colliery company would have given to say, "We need not bother about the colliery company: they would not have given anybody anything"? It is a debating point, a good scoring off point, but it is not an answer to the question. A colliery company would give a certain amount of compensation, or if it was left to arbitration the arbitrator would have to decide what amount of compensation should be paid. He could answer the question of compensation.
The right hon. Gentleman knows that these regulations do not provide enough. Is he going to alter them in the light of what was said in another place? Or is that why he tries to keep it from discussion by this false point of Order? We sometimes try that in court. When something which is not liked is going to be quoted, up jumps a barrister and says "I object. That is contrary to the rules of evidence." If it agrees with what he believes he will say he accepts it. But he does not make a cheap debating point. Is the Minister prepared to say that the principle is right that the National Coal Board will give the same amount of compensation as a colliery company would have given, and if there is a dispute it will go to arbitration? What does he say about that?

Colonel Crosthwaite-Eyre: In the original Bill I think the position was clear. No one employed by a colliery company would be worse off because the company was taken over by the Coal Board. It was a simple position. During the discussion on this Bill the Solicitor-General, in column 374, made it clear that under the new proposal of the Government people might be worse off or they might not be. He went on to say—about half way down that column—that it was not possible for the Government to define the term "expectation." Therefore, when this Bill left this House the Government had altered their first undertaking in the Coal Nationalisation Act, 1946, and had definitely changed and


modified for the worse the expectation of people in that industry. It was a clear position.
This Bill went to another place, and despite what the Minister has said, he will see at columns 1189 and 1190 of the Lords HANSARD, that the Lord Chancellor made quite clear that in view of what had been said in that House, he was going to ensure that no one with expectations should be worsened because of anything in the Bill we are now discussing. It seems to me that the problem is that the Solicitor-General in this House has said he cannot define "expectations" and that some people may be worse off, while the Lord Chancellor in another place has given a specific undertaking, speaking for the Government, that nobody is to be worse off, and, therefore, the right of expectation is acknowledged.
May I ask the Minister to answer a question? Does the Lord Chancellor's statement mean that the difficulties the Solicitor-General found have now been overcome and the position has reverted to exactly what it was when the original Act was passed in 1946? That is a simple question which has nothing to do with regulations, future suppositions, or mythical things. Does the statement of the Lord Chancellor bind His Majesty's Government in this House or not?

Mr. C. Williams: I thought there was something suspicious when the Government refused to answer another question on compensation. This is a very interesting position. We are accepting this Amendment, apparently on behalf of the Government and on behalf of everyone in the House, for the purpose of giving compensation under certain circumstances. The right hon. Gentleman in charge of this Bill when asked if he would back the statement made by a senior member of the Government in another place, told us just now to wait for the regulations. That is not the right way to treat the House of Commons, which has a perfect right to look after the interests of the ordinary people of this country and, when there is legislation of this kind, has the right and duty to see that the Government pay fair compensation.
There is here a curious position in which a junior Minister of this House is

refusing to say whether what was said by a senior Minister in another place is right or not. That is a clear instance of division among the Government. Would the Home Secretary be in a position to tell us which of the two Ministers is right? In the circumstances it is wrong that the House should be left in complete confusion as to what is happening at this moment. We have already had two distinct speeches from the Minister in charge of the Bill. So far as the position taken up by the Lord Chancellor is concerned, we must in all justice have some answer on behalf of the Government from someone who is really responsible. As I can see no one else here, I am sure that the Home Secretary will stand by either the Lord Chancellor or the Minister in this House. If he does neither we can conclude only that the Government are hopelessly divided.

Mr. Bracken: Can I ask for your guidance, Mr. Speaker. May I ask—[HON. MEMBERS: "No."] The Opposition—[HON. MEMBERS: "No."]

Mr. Speaker: Is the right hon. Member addressing a question to me? If he is asking leave to speak again, it is refused.

Mr. Bracken: It will not take more than one second. [Interruption.] Hon. Members have no right to intervene between Mr. Speaker and a Member. In view of the strange noises from opposite, would it be in Order to move to report Progress on this very important matter?

Mr. Speaker: I am afraid not. The right hon. Member has already exhausted his right to speak.

Mr. J. P. L. Thomas: May I move to report Progress?

Mr. Speaker: We cannot report Progress on a matter of this sort; it is the wrong question. One may move that the Debate be adjourned, but that is another matter.

Colonel Crosthwaite-Eyre: I beg to move, "That the Debate be now adjourned."

Sir Hugh Lucas-Tooth: I beg to second the Motion.

Question put.

The House divided: Ayes, 19; Noes, 63.

Division No. 211.]
AYES
[12.42 a.m.


Bracken, Rt. Hon. Brendan
Hudson, Rt. Hon. R. S. (Southport)
Thomas, J. P. L. (Hereford)


Buchan-Hepburn, P. G. T.
Hutchison, Lt.-Cdr. Clark (Edin'gh, W.)
Wheatley, Col. M. J. (Dorset. E.)


Clarke, Col. R. S.
Lancaster, Col. C. G.
Williams, C. (Torquay)


Conant, Maj. R. J. E.
Lucas-Tooth, Sir H.



Crosthwaite-Eyre, Col. O. E.
Maitland, Comdr. J. W.
TELLERS FOR THE AYES:


Digby, Simon Wingfield
Noble, Comdr A. H. P.
Mr. Studholme and


Drewe, C.
Orr-Ewing, I. L.
Brigadier Mackeson.


Foster, J. G. (Northwich)
Roberts, P. G. (Ecclesall)





NOES


Adams, Richard (Batham)
Hardy, E. A.
Robens, A.


Bacon, Miss A.
Henderson, Joseph (Ardwick)
Roberts, Goronwy (Caernarvonshire)


Baird, J.
Herbison, Miss M.
Royle, C.


Barton, C.
Hobson, C. R.
Sargood, R.


Bing, G. H. C.
Holmes, H. E. (Hemsworth)
Shawcross, Rt. Hon. Sir H. (St Helens)


Binns, J.
Houghton, Douglas
Simmons, C. J.


Blenkinsop, A.
Hughes, Hector (Aberdeen, N.)
Skeffington, A. M.


Braddook, Mrs. E. M. (L'pl, Exch'ge)
Jones, D. T. (Hartlepools)
Snow, J. W.


Collindridge, F.
Keenan, W.
Soskice, Rt. Hon. Sir Frank


Collins, V. J.
Kinley, J.
Sylvester, G. O.


Corbet, Mrs. F. K. (Camb'well, N. W.)
McLeavy, F.
Taylor, R. J. (Morpeth)


Cullen, Mrs. A.
Mallalieu, J. P. W. (Huddersfield)
Thomas, I. O. (Wrekin)


Davies, Harold (Leek)
Mann, Mrs. J.
Wallace, G. D. (Chislehurst)


Delargy, H. J.
Millington, Wing-Comdr. E. R.
Webb, M. (Bradford, C.)


Ede, Rt. Hon. J. C.
Mitchison, G. R.
Whiteley, Rt. Hon. W.


Edwards, W. J. (Whitechapel)
Morris, P. (Swansea, W.)
Willey, O. G. (Cleveland)


Farthing, W. J.
Nally, W.
Williams, J. L. (Kelvingrove)


Gaitskell, Rt. Hon. H. T. N.
Neal, H. (Claycross)
Williams, Ronald (Wigan)


Gibson, C. W.
Paling, Will T. (Dewsbury)
Williams, W. R. (Heston)


Grierson, E.
Pearson, A.



Griffiths, W. D. (Moss Side)
Price, M. Philips
TELLERS FOR THE NOES:


Hannan, W. (Maryhill)
Randall, H. E.
Mr. Popplewell and Mr. Wilkins.

Question again proposed, "That this House doth agree with the Lords in the said Amendment."

12.45 a.m.

Colonel Clarke: Through the fog of war which has descended on the House I discern one thing, that is, that there will be great disappointment among a number of people tomorrow when they read this Debate. On the day on which this Bill was brought in there was great anxiety among ex-colliery people as to what their position was. Many of them read the Debate in another place and felt very much reassured. They believed that the Debate tonight was really just a formality, in which the assurance given by the Lord Chancellor would be confirmed, but it appears that that confirmation is not forthcoming and that we have still to await the advent of regulalations before we know where we are.
I suggest that is exactly what the Lord Chancellor wished to avoid. It would not be right to quote what he said in Debate, but the tenor of his remarks was that the matter should be dealt with by the Bill itself and not by regulations. He well knew that regulations are unsatisfactory things. They can be debated in this House, but they cannot be amended. In his wisdom, the Lord Chancellor felt that a decision should be taken there

and then. The matter at present is in a very unsatisfactory state, and I hope that the Minister will be able to give us some more explanation than he has done up to the present with regard to his own position in the matter.

Colonel Crosthwaite-Eyre: rose—

Mr. Deputy-Speaker (Mr. Bowles): The hon. and gallant Gentleman has exhausted his right to speak. He seconded the Motion that the Debate be adjourned.

Sir H. Lucas-Tooth: On a point of Order, Mr. Deputy-Speaker. I seconded the Motion for the Adjournment, and I have not yet spoken.

Mr. Deputy-Speaker: I have already indicated that the hon. and gallant Member has exhausted his right to speak, whether he moved, or seconded, the Adjournment.

Mr. P. Roberts: I want to get the position clear, because, as far as I understand the Minister, he is now relying on the regulations which he is going to get under this Amendment. Is that right? Is the right hon. Gentleman relying upon the regulations which he is going to introduce to put into words the intention which the Lord Chancellor, in another place, has enunciated? Am I right in


thinking that those regulations will implement what the Lord Chancellor has said in another place? The Minister does not deny that supposition. I therefore assume that it is right. I should, therefore, like to ask him, first, how long we shall have to wait before these regulations will be issued; and, second, can we have any indication from the Parliamentary Secretary, or the Solicitor-General, of how long he imagines we shall have to wait for them.
As far as I can see, this matter has been in a state of indecision for nearly three-and-a-half years. There are people who have been encouraged to think that they were going to get a certain amount of compensation, but then an amending Bill was brought in. I know of two people who were left for two years without any indication of what the Minister was going to do about them. The reason they were left for those two years, as it turned out later, was that a new amending Bill was to be introduced. When that Bill was introduced, there was a certain amount of satisfaction. But now we have got back to a position in which these people have to wait even further for regulations to be enunciated. I hope that the Parliamentary Secretary, or the Solicitor-General, will be able to give us some idea when these regulations will be issued because I, for one, am not prepared to accept the Minister's statement unless we can have some indication from him on that matter.
I hope that this Debate will not close before we have had some indication from the Government about its intentions. We have had a definite statement by the Lord Chancellor in another place, which has already been quoted, and which, therefore, I do not propose to give to the House again. This has been followed, as far as we can see, by the Minister making a statement which does not accord with his senior colleague. [An HON. MEMBER: "A repudiation."] It may go even as far as a repudiation. The Minister has not actually gone as far as to say that, but he met it with a stony silence which, perhaps, can be accepted as a repudiation.
I wonder if the Minister has realised that this may have serious consequences? If he is going to treat the Lord Chancellor with such disrespect, it may be that the Lord Chancellor will once

again leave the ranks of the Socialist party. That would be sad. I suggest that the Minister should think very carefully before he adopts such a cavalier attitude. I hope that we shall have from some member of the Government an indication of how long it will b3 before the Regulations are introduced, and whether they will enshrine the remarks which the Lord Chancellor made in another place.

Mr. J. P. L. Thomas: I think the House has been treated in an extraordinary way. Will the Minister rise and tell us whether he repudiates the statement of the Lord Chancellor? So far we have had no answer from him.

Question put, and agreed to.

Lords Amendment: In page 6, line 22, insert new Clause "A"—(POWER TO PROVIDE FOR ENFORCEMENT AGAINST THE BOARD OF CERTAIN WORKMEN'S COMPENSATION LIABILITIES.)

"(1) If it appears to His Majesty in Council that arrangements have been made—

(a) between the Board and a person who at any time before the primary vesting date was the owner of an interest in property that vested in the Board under the principal Act, for the assumption by the Board of all or any of the workmen's compensation liabilities of that person; or
(b) between the Board and a mutual indemnity association of which any such person as aforesaid is, or was at any time, a member, for the assumption by the Board of all or any of such of the liabilities of the association under a contract of insurance entered into between them and any person (whether such a person as aforesaid or not) whereby he is or was insured against workmen's compensation liabilities to any workmen as, by virtue of the happening of any of the events mentioned in subsection (1) of section seven of the Workmen's Compensation Act, 1925 (which relates to bankruptcy, the winding up of companies, etc.), are enforceable against the association by the workmen, their legal personal representatives or their dependants or others to whom or for whose benefit compensation is payable;

he may by Order in Council provide for the enforcement of the liabilities to which the arrangements relate against the Board instead of against that person or, as the case may be, the association, as if the employment out of which the liabilities arise had been employment by the Board instead of by that or some other person or, as the case may be, the Board had subscribed the contract instead of the association and, in connection therewith, for conferring on the Board the rights and remedies which that person or, as the case may be, the association would have had in respect of the liabilities if they had remained


enforceable against that person or, as the case may be, the association.

(2) Where the discharge of a workmen's compensation liability which, by virtue of an Order in Council under the foregoing subsection, is rendered enforceable against the Board, is secured by virtue of a compensation trust, the Order may extinguish the liability of the trustees under the trust to make a payment in or towards the discharge of the first-mentioned liability.

(3) Where a person the discharge of any of whose workmen's compensation liabilities is secured by a compensation trust was at any time before the primary vesting date the owner of an interest in property that vested in the Board under the principal Act, the trustees under the trust shall have power, and be deemed always to have had power, to make to the Board, out of the trust fund created for the purposes of the trust, payments in consideration of the assumption by the Board, under arrangements made between the Board and that person, of any of those liabilities of that person the discharge of which is secured by the trust.

(4) An Order in Council under this section may contain such incidental and supplementary provisions as appear to His Majesty in Council to be requisite or expedient for the purposes of the Order, and—

(a) without prejudice to the generality of the foregoing provision, where an Order in Council under this section makes provision for rendering enforceable against the Board any liabilities of the Durham Colliery Owners' Mutual Protection Association, it may make such provision with respect to the exercise of all or any of the powers conferred by any order under paragraph (16) of the Second Schedule to the Workmen's Compensation Act, 1906, on a committee representative of that Association and an association of workmen as appears to His Majesty in Council to be requisite or expedient having regard to the provisions of the Order in Council; and
(b) without prejudice to the generality of the said provision or to the power conferred on His Majesty in Council by subsection (3) of section eighty-nine of the National Insurance (Industrial Injuries) Act, 1946, to provide for winding up compensation trusts, where an Order in Council under this section extinguishes liabilities of the trustees under such a trust it may, if it appears to His Majesty in Council to be requisite or expedient so to do, provide for the winding up of that trust;

and rules made under section four of the Workmen's Compensation (Coal Mines) Act, 1934, in relation to deposits made under that section by mutual indemnity associations may, notwithstanding the repeal of that Act by the said section eighty-nine, make provision for any matters consequential on the passing of this section.

(5) An Order in Council under this section may be varied or revoked by a subsequent Order in Council thereunder.

(6) In this section—

(a) the expression 'compensation trust' means a compensation trust for the purposes

of the Workmen's Compensation (Coal Mines) Act, 1934, and the expression 'mutual indemnity association' has the same meaning as in that Act; and
(b) the expression 'workmen's compensation liability' means a liability under the Workmen's Compensation Acts, 1925 to 1945, or the enactments repealed by the Workmen's Compensation Act, 1925, or the enactments repealed by the Workmen's Compensation Act, 1906, but does not include, in relation to any person, any such liability as aforesaid against which he is insured under a contract of insurance subscribed by a person other than a mutual indemnity association;

and references in this section to liabilities shall be construed as including references as well to contingent as to accrued liabilities."

Mr. Robens: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is to deal with the pre-vesting date compensation cases where a colliery mutuals and compensation trust had taken over the responsibility. The National Coal Board now takes over that responsibility, and it is necessary, therefore, that we should have an instrument for the winding up of the mutuals and the dissolution of their funds. This new Clause does that.

Question put, and agreed to.

Mr. R. S. Hudson: On a point of Order, Mr. Deputy-Speaker, may I say, with respect, that I started to rise before the Amendment was put to the vote—[Interruption.]

Mr. Deputy-Speaker (Mr. Bowles): I must have silence. I put the Amendment slowly to the House, and the right hon. Gentleman did not catch my eye.

Mr. Foster: On a point of Order. The right hon. Gentleman was standing up before the voices were collected.

Mr. Deputy-Speaker: I have given a Ruling on this matter.
Lords Amendment: In page 6, line 22, after the Amendment last inserted, insert the following new Clause "B" (Repeal of s. 23 of the Act of 1946):
Section twenty-three of the principal Act (which imposes restrictions on the disposal of government stock issued to a company in or towards satisfaction of compensation in respect of a transfer to the Board of assets, property, rights and liabilities of the company), and, in section thirty-three of that Act, the words 'stock issued in exchange under subsection (4) of section twenty-three of this Act' in subsection (1), and the words '(other than inalien-


able stock)' in subsection (6), are hereby repealed.

Mr. Gaitskell: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is a new Clause, the effect of which is to repeal Section 23 of the principal Act. That Section imposed certain restrictions on the disposal of stock issued to companies in satisfaction of compensation. A position has been reached in which those restrictions are no longer necessary, and we are happy to say good-bye to them.

Mr. R. S. Hudson: As this last Amendment is proposed it is, perhaps, an appropriate moment to call the attention of the few hon. Members remaining on either side of the House to the waste of time which has been involved in the procedure followed in this case. Days and days were spent by the Government in refusing Opposition Amendments, which they have now accepted. The Bill could have been better than it is, but it is now a considerably better Measure than it was originally, despite the waste of time, which we regret.

Question put, and agreed to.

Amendment agreed to.

Remaining Lords Amendments agreed to [One with Special Entry].

Committee appointed to draw up Reason to be assigned to the Lords for disagreeing to one of their Amendments to the Bill: Mr. Bracken, Colonel Clarke, Mr. Gaitskell, Mr. Harold Neal and Mr. Sylvester; Three to be the Quorum.—[Mr. Gaitskell.]

Committee to withdraw immediately.

Reason for disagreeing to one of the Lords Amendments reported, and agreed to; to be communicated to the Lords.

Clause 12.—(ENFORCEMENT OF REGULA- TIONS AS TO SALES, ETC., BY MANU- FACTURERS AND OTHERS.)

Lords Amendment: In page 13, line 36, after "heard," insert:
and has, in accordance with the rules regulating the procedure of the tribunal, procured himself to be made a party to the reference.

10.0 p.m.

Mr. Paling: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment corresponds to the similar Amendment in Clause 11, page 12, line 21. The same conditions of costs are applicable to intervenors under the present Clause as in Clause 11.

Clause 16.—(REGULATIONS AND ORDERS.)

Lords Amendment: In page 18, line 30, leave out from beginning to "shall," in line 33 and insert:
(2) The power to make orders conferred on the Postmaster-General by section eight of this Act and any power conferred on him by any of the provisions of this Act to make regulations shall be exercisable by statutory instrument, and any statutory instrument made in the exercise of any of the said powers.

Mr. Paling: I beg to move, "That this House doth agree with the Lords in the said Amendment."
It is not in accordance with Parliamentary practice to require Orders in Council extending the provisions of Acts of Parliament to the Isle of Man or to the Channel Islands to be laid before Parliament. The Amendment modifies the Bill accordingly.

Clause 19.—(INTERPRETATION.)

Lords Amendment: In page 20, line 12, after "means" insert "the prejudicing by."

Mr. Paling: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is a rather technical matter. The definition of "interference" in Clause 19 (4) of the Bill as it left this House was considered on reflection to be unsatisfactory. The definition treated the emission or reflection of electro-magnetic energy as the "interference," if the energy prejudiced the wireless telegraphy. But the "interference" consists not in the emitting or reflecting of the energy, but in the prejudicial effect of the energy on the telegraphy if the energy should get into the wireless receiver. The Amendment corrects the definition by giving it this sense.
Lords Amendment: In page 20, line 19, at end insert:
(5) In considering for any of the purposes of this Act, whether, in any particular case, any interference with any wireless telegraphy caused or likely to be caused by the use of any apparatus, is or is not undue interference, regard shall be had to all the known circumstances of the case and the interference shall not be regarded as undue interference if so to regard it would unreasonably cause hardship to the person using or desiring to use the apparatus.

Mr. Paling: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is similar to the previous Amendment.

Mr. Grimston: We are now on the Amendment to insert the new subsection at the end of line 19. I suggest to the right hon. Gentleman that it is not the same as the previous Amendment.

Mr. Paling: I beg your pardon, Mr. Speaker. My remark really applied to the previous Amendment.

Mr. C. Williams: The last statement of the Postmaster-General rather bears out what I thought earlier, that he has become thoroughly mixed and is not quite certain to which Amendment he is speaking. This is a most unsatisfactory procedure but it cannot be helped, I suppose, under this Government.

Mr. Grimston: May we have an explanation?

Mr. Speaker: The Question is, "That the House doth agree with the Lords in the said Amendment."

Mr. Brendan Bracken: Which Amendment?

Mr. Speaker: The Amendment to line 19.

Mr. Grimston: May we have an explanation of the Amendment? We have not had it yet.

Mr. Hobson: The Amendment attempts to define "undue interference." It is not only a technical definition of undue interference but it is framed in such a way as to take into consideration certain human circumstances which may arise with regard to cost or to the number of people who may be affected by the apparatus which is causing interference. It is in order to be less arbitrary that in another place the Amendment was inserted in order to prevent undue hardship.

First Schedule.—(PROCEDURE IN RELATION TO SUSPENSION AND REVOCATION OF AUTHORITIES TO WIRELESS PERSONNEL.)

Lords Amendment: In page 21, line 46, at end, to insert:
(5) Where the Postmaster-General revokes the authority or continues the suspension thereof, he shall, if requested so to do by the person to whom the authority was issued, inform him of the opinion which the advisory committee expressed as to the action which ought to be taken as respects the revocation of the authority or the continuation or termination of the suspension thereof.

Mr. Paling: I beg to move, "That this House doth agree with the Lords in the said Amendment."
Hon. Members opposite will remember that on the Committee stage they brought up the question of the revocation of authority, and asked that when such a decision was made the person concerned should be told some of the reasons for it. This gives power to give some of the reasons.

Second Schedule.—(PROVISIONS AS TO THE APPEAL TRIBUNAL.)

Lords Amendment: In page 22, leave out lines 3 to 20, and insert:
1.—(1) Subject to the provisions of this paragraph, the members of the appeal tribunal, other than any members appointed to act for a particular case, shall hold office for such period as may be determined at the time of their respective appointments.
(2) Any member of the tribunal may at any time by notice in writing to the Lord Chancellor resign his appointment.
(3) If a member of the tribunal becomes a member of the advisory committee, his office shall thereupon become vacant.
(4) The Lord Chancellor may declare the office of any member of the tribunal vacant on the ground of incapacity to perform the duties thereof, or on the ground of misconduct.
(5) If any member of the tribunal becomes bankrupt or makes an arrangement with his creditors, his office shall thereupon become vacant
(6) In the application of the preceding provisions of this paragraph to members appointed by the Lord President of the Court of Session, the Lord Chief Justice of Northern Ireland or the Secretary of State, references to the Lord President, Lord Chief Justice or Secretary of State, as the case may be, shall be substituted for the references to the Lord Chancellor.

Mr. Paling: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is a matter which relates to an Amendment to which we have agreed on a previous Clause, which refers to the inclusion on the Tribunal, where the chairman of the Tribunal or parties to the dispute require it, of two jurymen in addition to the chairman. The ordinary Tribunal consists of a chairman plus two assessors, and in cases where either the chairman or the two parties to the dispute require it it is proposed to add two jurymen in addition to the chairman.

Mr. Bracken: Can the right hon. Gentleman explain what he means by a juryman in this matter? Can a juryman return a verdict against the president's nominees.

Mr. Paling: There is a later Amendment as to whether it should be a majority decision, or not.

Mr. Bracken: But what is a juryman?

Mr. Paling: I believe I tried to explain that the ordinary Tribunal is composed of a chairman, a legal man, and two assessors and that the decision is in the hands of the chairman. It may be that in rather important cases it would be more desirable to have more than one person making the decision; therefore, two other persons should be included who may also have a say in the decision.

Lords Amendment: In page 23, line 17, after "president" insert:
or, in a case where additional members have been appointed, the decision of all, or, in the event of a difference of opinion, of the majority of, the members of the tribunal other than the assessors.

Mr. Paling: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This makes a majority decision necessary.

Mr. C. Williams: I think it is a good thing that we have this Amendment. I cannot understand why the Government, at an earlier stage, wanted to give the president the final power. It is quite natural that we should go to another place to remove the arbitrary powers put on the president, and now we lay it down quite clearly that in cases where additional persons are appointed the decision shall be the opinion of all, or in the case of a difference of opinion, it shall be the decision of the majority. That is good, sound, policy with which we all agree. But it is really shocking that we should always have to be having amending Bills which include appallingly arbitrary offices which the Government set up.

Mr. Peter Roberts: The Postmaster-General said that this dealt with two extra jurymen. I cannot see that the word "jurymen" comes into it at all. Could he explain how that is effected by this Amendment?

Captain Crookshank: I hope I shall not be accused of "undue interference" with this problem, but the Postmaster-General kept on using the word "juryman." He seems to be unacquainted with the fact that the word


"juryman" is a perfectly well-known technical term. Certain persons in the community have to serve on juries. So far as I can make out this has nothing to do with that sort of juryman. I imagine that there are to be special ad hoc appointed members of the Tribunal. If that is so it is a pity that the Postmaster-General did not make it clear. My hon. Friend is obviously completely confused in the matter and it is not his fault. It is due to the Postmaster-General using a technical term in a matter which is not technical. I ask the right hon. Gentleman whether that could be made clear.

Mr. Paling: I was indicating assent. If the right hon. and gallant Gentleman prefers it, I will say "yes."

Remaining Lords Amendments agreed to (Several with Special Entries).

Committee appointed to draw up Reasons to be assigned to the Lords for disagreeing to certain of their Amendments to the Bill: Colonel Gomme-Duncan, Mr. Grimston, Mr. Douglas Houghton, Mr. W. R. Williams and Mr. Wilfred Paling; Three to be the quorum.—[Mr. Wilfred Paling.]

Committee to withdraw immediately.

Reasons for disagreeing to certain of the Lords Amendments reported, and agreed to; to be communicated to the Lords.

Orders of the Day — NAVAL ORDNANCE INSPECTORS (PAY)

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Snow.]

1.1 a.m.

Lieut.-Commander Clark Hutchison: The subject which I am raising at this rather late hour is one which I have pursued steadily by corre-

spondence, by Question, and by speech in this House for some years past. It concerns the pay, allowances, and conditions of service of the permanent officers of an important but small and comparatively little-known branch of the Navy, the Naval Ordnance Inspection Department.
I think I am the only Member in this House who has served in this branch of the Navy and therefore has some personal knowledge of the conditions and the troubles which have beset that Department, though I gladly acknowledge that a number of my right hon. and hon. Friends have for some time past been taking a most active and vigorous interest in this Department. I should add that during the time I was in this Department during the war, I, like all the other officers temporarily attached to it during the war, came under the ordinary naval rates of pay and allowances and therefore was not concerned with this particular matter with which we are dealing tonight—namely, the case of the permanent officers.
As I explained to the House on previous occasions, notably in the Debate on the Adjournment on 21st November, 1945, and also in Debates on the Navy Estimates in April, 1946, and March, 1947, the permanent officers of this Department feel, and feel with reason, that the terms of Admiralty Fleet Order 2078 of 1931, which is their charter of service, are not being carried out. They aver that their rates of pay have not for some years past marched in step with the rates of pay which are granted to comparable officers serving on the general active list, though the footnote to the table of pay laid down in A.F.O. 2078 of 1931, states quite explicitly, and I quote it:
The above rates of pay will be comparable to the standard (1919) rates of pay of officers on the active list and will be subject to similar variations as the latter rates.
That official declaration seems to me to be absolutely plain and specific and leaves no room whatsoever for ambiguity, but in order to put forward the case for these officers with even greater clarity and precision, I will also refer the Civil Lord and the House to the Order in Council, dated 23rd July, 1931. The rules governing the pay and service of officers of the Royal Navy and Royal Marines employed in inspection, research, design, and experimental ordnance duties, are laid


down in paragraph 2 of that Order in Council:
The standard rates of the salaries of the officers included in the scheme shall be such as the Admiralty may lay down from time to time with the concurrence of the Treasury and shall be subject to review according to the cost of living at the same date and in the same manner as ordinary rates of full pay of officers on the general active list.
These are extracted from the two charters governing the conditions of service of officers in this Department—the Admiralty Fleet Order and the Order in Council. What has actually been happening in regard to the implementation of the pledges laid down in those official statements? In 1935, the rates of pay of officers on the Active List were cut by about 10 per cent. and the same cut was applied to the inspection officers, but when subsequent upward alterations were made in the pay of the general active list officers, the same upward movement was not made in the remuneration of the inspection officers, who were thereby put in an inferior position.
More than four years ago, when I raised this matter on the Navy Estimates, I gave a number of illustrations showing the very serious gap which existed between the rates of pay of comparable officers on the active list and in the Naval Ordnance Inspection Department. There was a gap in those days, but it has widened very considerably since I last raised the matter. Though at this hour of the night I regret having to inflict a number of figures on the House, it is the only way in which I can illustrate what I consider to be the shameful manner in which these officers have been treated. I have checked these figures to the best of my ability. I hope that the Civil Lord will correct me if I appear to make an error, but I can quote the authority for each figure which I give.
In 1931, a lieutenant-commander on the active list on promotion received £592, and in 1949, he receives £921, an increase of £329. In 1931, a commander on the active list on promotion received £730, and today he receives £1,250, an increase of £520. In 1931 a senior commander after six years' service received £876, and today he receives £1,387, an increase of £511. In 1931 a captain on promotion received £1,095, and today receives £1,569, an increase of £474. The

average increase for those four grades of active service officers is in the region of £458.
What about comparable officers in the inspection service? In 1931, a lieut.-commander occupying a grade D post received £800, and today he receives £814, an increase of £14 over that 18-year period. In 1931, a junior commander in the inspection service, occupying a grade C post, received £900, and today receives £910, an increase of £10. In 1931, a senior commander in the inspection service, occupying a grade B post, received £1,100, and today receives exactly the same. In 1931, a captain in the inspection service, occupying a grade A post, received £1,350, and today receives £1,341, a decrease of £9. The average increase for all those grades of officers over the whole of the long period is precisely £4.
That is a shameful state of affairs having regard to the changes which have taken place during that long period. The House is well aware that in comparing 1949 with 1931, we find that there has been a heavy increase in the cost of living, a rise of over 50 per cent. My authority for that is the Annual Abstract of Statistics and the Monthly Digest of Statistics. Secondly, there has been a substantial fall in the value of money, and the pound today is worth 5s. less in purchasing power than it was in 1931. My authority for that is the present Chancellor of the Exchequer in a written answer to a Question on 2nd June in column 170 of HANSARD. Thirdly, a large increase in wage rates in industry generally has taken place since 1931, something in the nature of 100 per cent. I have obtained that by careful checking from the Annual Abstract of Statistics.
These are very striking facts. Apart from that, there are many other disadvantages that inspecting officers have suffered and to which I alluded very fully in the previous Adjournment Debate on 21st November, 1945. I commend these to the study of the Civil Lord, as the reply to that debate was taken by the Financial Secretary. I would only say that the inspecting officers receive a small victualling allowance, that they do not receive tax-free marriage allowance and that they did not receive a war service gratuity nor end-of-the-war leave.
In answer to the previous Debate three and a half years ago, the Financial Secretary to the Admiralty endeavoured to show that the inspecting officers had certain advantages over the active service officers, but in fact those advantages did not appear on examination to be very great. In fact, the only important one he was able to quote was the fact that inspection officers did not come under the Naval Discipline Act and therefore could not be court-martialled. I think I said at the time that that was a wierd kind of advantage to put forward unless it was assumed that those officers had criminal proclivities. When the news of this particular argument reached my former colleagues in the inspection service, the letters I received were in terms that were blunt even for the Navy, and it would be quite improper for me to repeat them to the House.
The only solid fact which emerged from the Debate was that the Financial Secretary did agree that all was not well with the Department and he said in his concluding statement:
It has been decided that the future structure of this particular Branch shall be investigated as part of the post-war reconstruction programme. All the points raised by the hon. and gallant Member will be considered in this investigation."—[OFFICIAL REPORT, 21st Nov. 1945; Vol. 416; c. 523.]
The next development was a remark made by the Civil Lord himself during the Debate on the Navy Estimates in March, 1947, when in answer to a question I had put to him in the course of the Debate, he said:
The hon. and gallant Member for West Edinburgh made out a useful case in regard to the Naval Ordnance Inspection Department. All I can tell him is that this matter is under active consideration, and no doubt he will not have to wait so long for a reply as he has done in the past."—[OFFICIAL REPORT, 18th March, 1947; Vol. 435; c. 361.]
The Civil Lord has I fear erred on the side of optimism, as two years have gone by and we are still waiting to hear what has happened. This long delay is all the more surprising as the House is aware that a Committee of Inquiry was appointed to consider terms and conditions of service. That Committee was appointed in December, 1946, under the very able chairmanship of Rear-Admiral Madden. The Committee made its report in April, 1948. Thus a year has elapsed since the Committee completed its task; but no news of its activities has been

vouchsafed to us. It is no wonder that I and a number of my hon. Friends on this side of the House should have felt compelled in recent months to put down a number of Questions to the Admiralty in order to try to penetrate this veil of secrecy laid over the Madden Committee's Report. Surely it is now time—and more than time—that the Admiralty should inform the House and the Service of its policy in regard to this very ill-treated Department.
I have stated this case as objectively as I can, but I do not conceal for a moment that I feel very strongly about it both on personal and national grounds. The Naval Ordnance Inspection Department is vital to the security of the Fleet because it is charged with functions of the most important nature, including the proving of ammunition, explosives, mines, projectiles and the other weapons of offence with which our ships are equipped. It is due to the work of this Department—formed only after the conclusion of the First World War—that we were spared during the recent war such terrible disasters as the blowing up of the "Princess Irene," the "Natal," the "Bulwark" and the "Vanguard," due to defective ammunition.
It is absolutely essential, in the interests of the nation and for the security of the Fleet, that this Department should be kept in a high state of efficiency. That means that skilled and experienced officers have got to be held, because the work involved is both technical and at times hazardous. I know of two officers in the Department, former colleagues of mine, who lost their lives in testing detonators and shell fillings. It is therefore disquieting to learn that since the conclusion of the recent war something like one-third of the experienced officers have left this Department, disgusted with the prospects and conditions of service, and have taken up other vocations. I ask the Civil Lord of the Admiralty to tell us what is to be done to improve the conditions of service of the permanent officers of this department, and I say to him in the time-honoured words used for the endorsement of petitions of loyal subjects of the Crown, "Let right be done."

1.16 a.m.

Commander Maitland: I should like to add my views to what


my hon. and gallant Friend has just said. I agree with everything he has said. I should like to add something which he cannot say, and that is to emphasise what an important department the Naval Ordnance Inspecting Department is, and how that on their accuracy depend the lives of thousands of men in the Royal Navy. I had an opportunity of working from the other point of view. I was in touch with their work as a specialist officer, and I would like to pay my tribute to the way they did their work during the war.
Everybody in the Royal Navy knows that these officers do not have the same chance of promotion to the really high ranks as do officers serving in the ordinary executive branches of the Navy. It is for that reason that ever since the branch was formed, they have normally had relatively higher pay than have officers of equivalent rank of the executive side. I simply want to add this to what my hon. and gallant Friend has said, and I challenge the hon. Gentleman who is to reply to deny that these officers are now paid on a lower scale than officers of relative rank on the executive side. These officers were led to believe that their pay would be increased, but it has not been increased. It is a disgrace to the Admiralty and to the Royal Navy that it has not been.

1.18 a.m.

The Civil Lord of the Admiralty (Mr. W. J. Edwards): It has been said that this is only a very small body of men whom we are considering in this Adjournment Debate, but I am certain that the House will agree that at least if it is small it has had a fair amount of representation in this House on a large number of occasions. The hon. and gallant Member for Horncastle (Commander Maitland) has mentioned the way in which this body of people has been treated in the matter of pay. In the 1930's it was decided by the Admiralty that the salaries of these officers were to be reduced, and one of the reasons why the salaries in 1949 are not much higher than the salaries in 1931 is because of the large reduction imposed by the Government of the 1930's.

Commander Maitland: Surely if my memory is right, the salary of a Naval Ordnance inspecting officer has always

been higher, and was higher at the time about which the hon. Gentleman is talking, than that of officers of relatively similar rank serving in the Navy. If it is not so, I should be interested if he could give me the figures.

Mr. Edwards: I do not think that is correct, but that is not the point I am making. I am referring to the charge made by the hon. and gallant Member for West Edinburgh (Lieut.-Commander Hutchison) with regard to the salaries received today as related to those in 1931. In fact, there has been a consolidated war bonus, in 1945, of £120 to £90 in most cases. That proves that from 1931 to the start of the war there must have been a similar reduction if the figure in 1949 was not higher than that in 1931. But I do not want to get involved in a lot of discussion about this.
The hon. and gallant Member for West Edinburgh has certainly taken a deep interest in the matter and I have had the good fortune to be able to read the speech which he made on an Adjournment debate in 1945 and of knowing exactly what he was going to say tonight. When HANSARD is published tomorrow. I doubt whether there will be found to be much difference in the wording.

Lieut.-Commander Hutchison: I quoted figures which were absolutely up to date and took in account changes made in the post-war pay code and Admiralty Fleet Order 995 of 1949.

Mr. Edwards: Could that not have been covered by looking up speeches made in the Debate on Navy Estimates? In my view, the speech was not much different from that made in 1945 and to which a reply was given by my hon. Friend the Parliamentary Secretary.

Lieut.-Commander Hutchison: A very inadequate reply.

Mr. Edwards: Inadequate, perhaps, but that reply stated clearly and briefly that these officers are not comparable with officers serving afloat, and became less comparable as the years have gone by. As the result of Admiralty consideration of this matter, a committee was set up in 1921. It was not until 1924 that the Admiralty of that time submitted recommendations of the committee to the Treasury. We are being accused of delay because a committee was set up in


1946 and our submissions have already been made. The Madden Committee went into the whole question of the inspection pool from the points of view of manning and salaries. It took some considerable time to go into the matter because it was a most complex one which had to be examined carefully. I was glad to hear the views of the hon. and gallant Member for West Edinburgh on the chairman of that committee, Admiral Madden.
The recommendations made by that committee with regard to salaries have been given most careful and favourable consideration by the Admiralty, and agreement has now been reached with the Treasury on the consolidated salary scales for inspectors, and it would perhaps be convenient for the House if I read them out. The Department was informed yesterday of these new salary scales, which are: C.I.N.O. £1,700; Group A: £1,400 commencing, rising by yearly increments of £50 to £1,550; Group B: £1,175, rising by annual increments of £35 to £1,350; Group C: £975, rising by annual increments of £30 to £1,125; Group D: £800, rising to £950. All these are being ante-dated to the 1st January, 1947.
I can assure the House, after the most careful consideration of the committee's recommendations, that I do not think there will be much cause for complaint about these new scales. The matter

could, perhaps, have been dealt with more quickly, but if it had been, the possibility is that I might not have been able to announce the same figures. I trust, in view of the fact that I have been able to state that this matter has come to finality, after a large number of Parliamentary Questions and interesting discussions both on the Navy Estimates and on Motions for the Adjournment, that we have cleared the matter away at least for the time being.

1.26 a.m.

Mr. J. P. L. Thomas: This Adjournment Motion has certainly served a most useful purpose. I am grateful to the Civil Lord for having given us these figures, and especially for his announcement that they are retrospective to 1947. I thank the Civil Lord, and congratulate my hon. and gallant Friend on his unceasing battle on behalf of this important section of the Royal Navy. He had a go at me a past regime, and he passed from me to the Civil Lord. I am sure the officers and men concerned are most grateful to him for his services on their behalf. We on this side are delighted that the Adjournment Motion tonight has resulted in the announcement of these new scales.

Question put, and agreed to.

Adjourned accordingly at Twenty-eight Minutes past One o'Clock a.m.